Oleg Itskhoki on Sanctions Debate - Dictionary of Arguments

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Sanctions Debate: The Sanctions Debate in economics revolves around the effectiveness, ethics, and unintended consequences of economic sanctions as a foreign policy tool. While policymakers increasingly use sanctions, scholars often question their utility, pointing to their mixed record in achieving stated goals like regime change or behavioral shifts. The debate also highlights concerns about humanitarian impacts, enforceability, and potential for evasion. See also Sanctions, Sanctions policies, Sanctions theory, Sanctions effectivenss. _____________ Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

> Itskhoki, Oleg	> Sanctions Debate	Oleg Itskhoki on Sanctions Debate - Dictionary of Arguments Itskhoki I 7 Sanctions Debate/Itskhoki/Ribakova: (…) , to date, the most comprehensive case-by-case analysis of sanction episodes, together with key policy takeaways, remains "Economic Sanctions Reconsidered, 3rd Edition" by Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg (2009)⁽¹⁾. David Baldwin's seminal work, "Economic Statecraft" (2020)⁽²⁾, lays a comprehensive foundation, explaining the mechanisms and effectiveness of economic instruments in foreign policy. “War by Other Means: Geoeconomics and Statecraft” by Jennifer M. Harris and Robert D. Blackwill (2016)⁽³⁾ emphasizes the growing importance of geoeconomics as a tool of statecraft in global politics. Juan Zarate's "Treasury's War" (2013)(4) complements this by providing a practical insider perspective on financial warfare post-9/11, underscoring the growing importance of financial instruments in modern statecraft. In addition, Chris Miller's "Chip War" (2022)(5) and Nicholas Mulder's "The Economic Weapon" (2023)⁽⁶⁾ expand the discourse by exploring the strategic importance of the semiconductor industry and the historical evolution of sanctions, respectively. Agathe Demarais' "Backfire" (2022)⁽⁷⁾ further examines the unintended consequences of U.S. sanctions, highlighting how they can reshape global alliances and economic landscapes. Similarly, "Underground Empire" (2023)⁽⁸⁾ focuses on the US weaponizing its control of the critical nodes for achieving foreign policy and security objectives. Finally, Saleha Mohsin's "Paper Soldiers" (2024)⁽⁹⁾ is recommended, providing a detailed examination of modern financial sanctions and adding contemporary relevance to the discourse. Itskhoki I 8 Sanctions against Russia: Regarding Russia’s specific case, some several papers and books explore the impact of sanctions on Russia (post-2014 and 2022). The most important among them include the working paper “Measuring Smartness: Understanding the Economic Impact of Targeted Sanctions”, which analyzes the economic effects of targeted or “smart sanctions” that aim to minimize harm to the general population and broader economy (Ahn and Ludema 2020)⁽¹⁰⁾ that analyzes the economic effects of targeted or “smart sanctions” that aim to minimize harm to the general population and broader economy. Several papers by the Institute of International Finance take stock of Russia’s response to 2014 sanctions and its preparedness for the following sanctions. These papers also emphasize the critical importance of enforcement for the effectiveness of sanctions. “Punishing Putin” (Baker 2024)⁽¹¹⁾ provides a description of the global response to Russia's full-scale invasion of Ukraine in 2022, with a focus on the sanctions imposed on Vladimir Putin, his inner circle, and Russia’s economy. Effectivenss: Issues have been raised regarding the ineffectiveness of the oil price cap, including by the authorities themselves (Van Nostrand and Morris 2024)⁽¹²⁾, and export controls. The early success of the oil price cap, which reduced Russian oil rents without destabilizing global prices, has since been overshadowed by a lack of enforcement (Hilgenstock et al. 2023)⁽¹³⁾. A major challenge to price cap enforcement has been Russia’s buildup of a so-called “Shadow Fleet,” which is made up of oil tankers that are not owned, managed, or insured by entities that fall under the jurisdiction of the sanctions coalition (Hilgenstock, Hrybanovskii, and Kravtsev 2024)⁽¹⁴⁾. Designations of Shadow Fleet vessels, particularly by the US Treasury Department’s Office of Foreign Assets Control (OFAC), have been an effective tool for reducing Russia’s ability to disregard the price cap without removing aggregate capacity from the market (Hilgenstock, Kravtsev, and Pavytska 2024)⁽¹⁵⁾. The designation campaign remains limited in scope, however. Itskhoki I 9 Export controls: Room for improvement is most notable in corporate responsibility - where Know Your Customer-like regulations could reduce illicit flows through third party intermediaries - intra-coalition coordination and harmonization, and institution building (Bilousova et al. 2024)⁽¹⁶⁾. Russia’s inability to substitute for goods, particularly high-tech electronics, from entities in the sanctioning coalition highlights the unrealized potential of export controls. Theoretical literature: Sanctions on Russia in 2014 and 2022, as well as earlier rounds of sanctions on Iran, have spurred an active quantitative and theoretical literature on the topic. Felbermayr et al. (2019)⁽¹⁷⁾ build a dataset of information on sanctions between 1950-2016 to analyze the effect of sanctions on trade flows and real GDP change (see also Gutmann et al. 2023). Hausmann et al. (2024)⁽¹⁸⁾ provide a criterion for sectoral bans on Russian exports at a detailed industry level. De Souza et al. (2024)⁽¹⁹⁾ examine the most cost-efficient policies for imposing trade sanctions. Crozet and Hinz (2020)⁽²⁰⁾ quantify the economic impact of the sanctions imposed on Russia in 2014 using a gravity model, as well as the implied costs to sender countries. Ghironi et al. (2024⁽²¹⁾) use a quantitative model to study macroeconomic and trade impacts of sanctions on financial markets, energy, and differentiated goods for both sender and receiver countries. Kilian et al. (2024)⁽²²⁾ examines the impact of the 2022 oil embargo and price cap on Russian oil prices using a calibrated model of the global oil market. Nigmatulina (2023)⁽²³⁾ examines the effects of "smart sanctions" imposed by the US and EU on specific Russian firms and individuals following Russia's annexation of Crimea in 2014, and finds that these firms have increased their operations due to a reallocation of government resources towards them (see also Keerati 2023)⁽²⁴⁾. Balyuk and Fedyk (2023)⁽²⁵⁾ examines the decision and its financial consequences for the U.S. firms to exit Russian operations following the 2022 invasion of Ukraine. Ndiaye (2024) studies how international boycotts, as a form of consumer activism, differ from government-imposed sanctions and tariffs. >Sanctions, >Sanctions consequences, >Sanctions debate, >Sanctions effectiveness, >Sanctions evasion, >Sanctions history, >Sanctions policies, >Sanctions theory, >Trade sanctions, >Financial sanctions, >Payment systems. 1. Hufbauer, Gary Clyde, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg. 2009. Economic Sanctions Reconsidered: Third Edition. Peterson Institute for International Economics. 2. Baldwin, David A. 2020. Economic Statecraft: New Edition. Princeton University Press. 3. Blackwill, Robert D., and Jennifer M. Harris. 2016. War by Other Means: Geoeconomics and Statecraft. Harvard University Press. https://www.jstor.org/stable/j.ctt1c84cr7. 4. Zarate, Juan. 2013. Treasury’s War. PublicAffairs 5. Miller, Chris. 2022. Chip War: The Fight for the World’s Most Critical Technology. Scribner. 6. Mulder, Nicholas. 2023. The Economic Weapon: The Rise of Sanctions as a Tool of Modern War. Yale University Press. 7. Demarais, Agathe. 2022. Backfire: How Sanctions Reshape the World Against U.S. Interests. Columbia University Press. 8. Farrell, Henry, and Abraham L. Newman. 2023. Underground Empire: How America Weaponized the World Economy. Random House. 9. Mohsin, Saleha. 2024. Paper Soldiers: How the Weaponization of the Dollar Changed the WorldOrder. Portfolio. 10. Ahn, Daniel P., and Rodney D. Ludema. 2020. “The Sword and the Shield: The Economics of Targeted Sanctions.” European Economic Review 130 (November):103587. https://doi.org/10.1016/j.euroecorev.2020.103587. 11. Baker, Stephanie. 2024. Punishing Putin. Scribner. 12. Van Nostrand, Eric, and Anna Morris. 2024. “Phase Two of the Price Cap on Russian Oil: Two Years After Putin’s Invasion.” U.S. Department of the Treasury. February 23, 2024. https://home.treasury.gov/news/featured-stories/phase-two-of-the-price-cap-on-russianoil-two-years-after-putins-invasion. 13. Hilgenstock, Benjamin, Elina Ribakova, Nataliia Shapoval, Tania Babina, Oleg Itskhoki, and Maxim Mironov. 2023. “Russian Oil Exports Under International Sanctions.” SSRN Scholarly Paper. Rochester, NY. https://doi.org/10.2139/ssrn.4430053. 14. Hilgenstock, Benjamin, Oleksii Hrybanovskii, and Anatoliy Kravtsev. 2024. “Assessing Russia’s Shadow Fleet: Initial Build-Up, Links to the Global Shadow Fleet, and Future Prospects.” KSE Institute. https://sanctions.kse.ua/wp-content/uploads/2024/06/Global-ShadowFleet-June-2024.pdf. 15. Hilgenstock, Benjamin, Anatoliy Kravtsev, and Yuliia Pavytska. 2024. “The Core of Russia’s Shadow Fleet: Identifying Targets for Future Tanker Designations.” KSE Institute. 16. Bilousova, Olena, Benjamin Hilgenstock, Elina Ribakova, Nataliia Shapoval, Anna Vlasyuk, and Vladyslav Vlasiuk. 2024. “Challenges of Export Controls Enforcement: How Russia Continues to Import Components for Its Military Production.” Yermak-McFaul International Working Group on Russian Sanctions & KSE Institute. 17. Felbermayr, Gabriel J., Constantinos Syropoulos, Erdal Yalcin, and Yoto V. Yotov. 2019. “On the Effects of Sanctions on Trade and Welfare: New Evidence Based on Structural Gravity and a New Database.” Working Paper. CESifo Working Paper 7728. Rochester, NY. https://doi.org/10.2139/ssrn.3422152. 18. Hausmann, Ricardo, Ulrich Schetter, and Muhammed A Yildirim. 2024. “On the Design of Effective Sanctions: The Case of Bans on Exports to Russia.” Economic Policy 39 (117): 109–53. https://doi.org/10.1093/epolic/eiad043. 19. De Souza, Gustavo, Naiyuan Hu, Haishi Li, and Yuan Mei. 2024. “(Trade) War and Peace: How to Impose International Trade Sanctions.” Journal of Monetary Economics 146 (September):103572. https://doi.org/10.1016/j.jmoneco.2024.103572. 20. Crozet, Matthieu, and Julian Hinz. 2020. “Friendly Fire: The Trade Impact of the Russia Sanctions and Counter-Sanctions.” Economic Policy 35 (101): 97–146. https://doi.org/10.1093/epolic/eiaa006. 21. Ghironi, Fabio, Daisoon Kim, and G. Kemal Ozhan. 2024. “International Trade and Macroeconomic Dynamics with Sanctions.” Working Paper. NBER Working Paper 32188. National Bureau of Economic Research. https://doi.org/10.3386/w32188. 22. Kilian, Lutz, David Rapson, and Burkhard C. Schipper. 2024. “The Impact of the 2022 Oil Embargo and Price Cap on Russian Oil Prices.” Working Paper. FRB of Dallas Working Paper 2401. Rochester, NY. https://doi.org/10.24149/wp2401. 23. Nigmatulina, Dzhamilya. 2023. “Sanctions and Misallocation. How Sanctioned Firms Won and Russia Lost.” Working Paper. 24. Keerati, Ritt. 2022. “The Unintended Consequences of Financial Sanctions.” Working Paper. Rochester, NY. https://doi.org/10.2139/ssrn.4049281. 25. Balyuk, Tetyana, and Anastassia Fedyk. 2023. “Divesting under Pressure: U.S. Firms’ Exit in Response to Russia’s War against Ukraine.” Journal of Comparative Economics 51 (4): 1253–73. https://doi.org/10.1016/j.jce.2023.08.001. _____________ Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.	Itskhoki I Oleg Itskhoki Elina Ribakova The Economics of Sanctions: From Theory Into Practice. Brookings Papers on Economic Activity, Fall 2024. The Brookings Institution 2024

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