The impact of sanctions on Iran’s military spending

His research finds that the final effect of sanctions on military spending depends on the relative size of the security and income effects of sanctions. In other words, the expectation is that sanctions increase the military expenditures of the target country if the security effect is large enough to motivate an increase in target country’s military expenditures, and the income effect is weak enough not to damage the target’s financial resources significantly.

Using annual data from 1960 to 2017, his results reveal that an increase in the intensity of sanctions is associated with a larger decrease in military spending in both the short and the long run.

He also finds that only the multilateral sanctions, in which the United States acts in conjunction with other countries to sanction Iran, have a statistically significant and negative impact on military spending of Iran in both the short and the long run.

About the speaker

Dr Sajjad Faraji Dizaji is a lecturer at the School of Economics, Finance and Accounting of Coventry University. He was an associate professor of Economics at Tarbiat Modares University, Iran. He received his PhD in Economics from the Tarbiat Modares Univesity in 2012 when he also did a one-year visiting study at the International Institute of Social Studies (ISS) of Erasmus University. 

During 2018-2021, he received a research fellowship through the Gerda Henkel Foundation for the 'Economic Sanctions and Conflict Resolution' project. He was also involved in a collaborative research project on the political economy of sanctions funded by the Qatar National Research Fund in cooperation with Coventry University, England. 

In 2022, Sajjad acted as a research fellow for the project 'Natural Resource Extractivism in Latin America and the Maghreb', financed by the German Federal Ministry of Education and Research (BMBF) and hosted by the Philipps-University Marburg and the University of Kassel. 

He has authored and co-authored several books and book chapters and published in refereed national and international journals.