Economics Dictionary of ArgumentsHome
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| Sanctions objectives: Sanctions objectives in economics are primarily to compel a target country or entity to change its behavior by imposing economic costs. These goals can include Deterring aggression or illicit activities (e.g., terrorism, nuclear proliferation). Promoting human rights and democracy. Destabilizing regimes or influencing policy changes. Resolving territorial disputes or ending conflicts. See also Sanctions, Sanctions policies._____________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. | |||
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Oleg Itskhoki on Sanctions Objectives - Dictionary of Arguments
Itskhoki I 10 Sanctions Objectives/Itskhoki/Ribakova: (…) [there are] the three key objectives of sanctions*: 1. Limit the production capacity of the economy under sanctions. 2. Limit financing capacity of the economy and put pressure on the government budget constraint. 3. Limit production in certain key sectors of the economy, in particular military production and procurement. These objectives may be achieved by means of a swift turbulence in the financial markets, due to a bank run or a balance-of-payment crisis, or over a longer horizon by tightening budget constraints to source inputs and curbing productivity of the economy overall or in certain key sectors. In addition, the sanctioning coalition might have in mind two additional dynamic considerations. First, symbolic sanctions without significant economic bite may be used to send a signal of future sanctions to come if the receiver country does not change its course. Such sanctions do not need to have a tangible economic impact but should outline the counters of likely future sanctions used as deterrent. Itskhoki I 11 While useful for providing incentives, this strategy also offers time to the sanctioned country to build an economic fortress for when tangible sanctions are imposed. Second, the coalition may want to use current sanctions as a punishment strategy which is observed by third countries and acts to prevent future deviations. For this to work, sanctions must be so severe as to make such deviations entirely untenable and hence not realized along the observed equilibrium path, which in turn allows the coalition to avoid bearing the costs of imposing such sanctions. This, of course, requires commitment and resolve on the part of the coalition, otherwise such threats are not credible, and deviations do happen along equilibrium path. This view changes the appropriate cost-benefit calculation, as the benefits must include the additional - and perhaps much larger - indirect benefits due to incentives they provide for avoiding future conflict.** >Sanctions, >Sanctions consequences, >Sanctions debate, >Sanctions effectiveness, >Sanctions evasion, >Sanctions history, >Sanctions policies, >Sanctions theory, >Trade sanctions, >Financial sanctions. * Since our focus is on the short-to-medium run impact of sanctions, we leave out some additional important dimensions such as sanctions that aim to limit technology transfer and foster skilled emigration (“brain drain”), which are both relevant in the context of Russia but their impact has not yet materialized. ** This is the reason why many European economists, unlike European industrial lobbyists, supported swift and overwhelming sanctions on Russian energy exports immediately after the invasion started in 2023._____________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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