Unintended Consequences of Sanctions

I recently published a review of two important books on economic sanctions, their intended and unintended consequences and how they interact with other political and economic trends. Read an excerpt below or the whole piece at this link https://www.lawfareblog.com/unintended-consequences-economic-sanctions

Economic sanctions are being used more and more often but also face more questions of effectiveness, especially as they are used on larger and larger targets. The recent anniversary of the 2022 Russian invasion of Ukraine prompted considerable analysis of the effectiveness of economic sanctions. In the Russia case, sanctions are clearly having an economic impact, reducing Russia’s economic and policy choices, resulting in a smaller but more centralized economy that is increasingly reliant on a smaller number of trading partners. However, there are no signs that the war is coming to an end. The Russian sanctions highlight two linked trends—the economic impacts of sanctions may build over time, impairing future investment and growth, while at the same time workarounds develop, creating resiliency. To maintain similar levels of pressure, new sanctions are required, often creating a whack-a-mole situation.

Policymakers in the U.S. have begun to shift away from a prior assessment that sanctions are meant to prompt policy change, and more applications seem designed to degrade and limit the access of malign actors to the global economy. Russia is a case in point.

Two recent books add to the literature on how sanctions are reshaping the global economy and the intended and unintended consequences of that reshaping. They also call into question whether broader use might undermine U.S. interests and the role of the U.S. dollar in the global economy. These books are important additions to the literature, both for their case studies and data collection and for their clear explanations of complex financial plumbing, export controls, and supply chain integration.