Global sanctions are becoming more prevalent as major powers and coalitions of states resort to them in response to violent conflict or human-rights violations – for example, after Russia’s aggression in Ukraine in 2022. These sanctions influence not only international trade flows and relations between countries but the global economy as a whole.
Sanctions and embargoes are a tool of economic statecraft, used to pressure countries for their own political goals, such as repressive governance or alleged links with terrorist organizations. They can raise the cost of repressive behavior and encourage reform by signaling solidarity with oppressed populations. They also provide a way to show a country’s commitment to universal values. But they are not foolproof – and in many cases the damage to the sanctioning economy is greater than expected.
This can be a result of criminal elements building illegal networks, nonparticipating countries allowing or facilitating sanctions evasion and leakage, and the inherent limitations of implementing multilateral, targeted restrictions in global trade. Despite these challenges, sanctions remain an effective tool in the toolbox of any state seeking to protect its security and interests.
However, the extent to which sanctions have major global economic effects should trigger a rethink of how they are used, particularly against targets that have large economies and are heavily integrated into world markets. This will require a more sophisticated understanding of the relationship between trade and political outcomes, including an ability to measure and compare the costs and benefits of different sanctions instruments.