What the political economy literature tells us about blockades and sanctions

We are pleased to alert you to ISS working paper 663, entitled What the political economy literature tells us about blockades and sanctions, by Sajjad Faraji Dizaji, Piotr Lis, Syed Mansoob Murshed and Mahjoob Zweiri.

Economic sanctions are usually defined as restrictions on customary trade and financial relations imposed by one or more countries against a target country, group, or individual for political and security policy purposes. Most existing studies of the effects of sanctions and blockades, whether bilateral or multilateral, are conducted from the perspective of the initiating or ‘sender’ country, which is typically a great power, e.g., the United States. However, there is a lack of literature on the possible policies that target nations may develop to prevent compromising their security, especially economic security, as well as neutralize the negative impact of sanctions. Sanctions and blockades disrupt the flow of international trade in goods, services and capital. These have consequences for the composition of output, employment, consumption and investment, and may also exert substantial effects on households, firms and government expenditures in targeted nations. Thus, it is important to understand the effects of blockades and sanctions on economic growth and public expenditure on security, military, health and education. Apart from the long-run growth consequences of sanctions and blockades, many of the macroeconomic effects are likely to be relatively short-lived, decaying over time as the economy adjusts to sanctions. Therefore, econometric techniques applied to investigate the impact of sanctions should be able to capture the simultaneous interplay between economic outcomes, political factors and adjustment processes, as in reality economics and politics are inseparable.


Sanctions, blockades, international trade, economic effects, social effects, political effects.

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