Sanctions are among the most significant coercive instruments that states deploy to influence other countries and to advance their own interests. Yet they remain notoriously difficult to understand and evaluate, despite their enormous impact on the global economy. This article makes a major contribution to the field by compiling an unprecedented dataset of sanction policies and their effectiveness over time.
Using the new Global Sanctions Database (GSDB), we find that sanctions have been much less effective than commonly assumed. This is due in large part to the broadening of transmission channels through which sanction shocks ripple across the world economy. Twenty-first century globalization has multiplied the costs of imposing sanctions by raising commodity prices, increasing transaction and supply bottlenecks, and multiplying trade losses and economic disruption.
The GSDB is the first to systematically list the objectives behind official sanctions and to combine these with an assessment of their success rate. As a result, it allows for a more rigorous evaluation of the effectiveness of sanctions as a tool of international influence. Moreover, the GSDB offers a novel method for quantifying the costs to the sender and the target of sanctions.
The GSDB shows that in cases of successful sanctions, the average cost to the sender is 2.4 percent of its GDP and 1 percent of its GNP in the case of failures. It is important to remember that this is a very modest figure. The interwar period was characterized by agrarian crises, monetary collapse, and global price deflation, which reduced exports and hampered the functioning of currency blocs and trade pacts.