A Brief Review of the Effectiveness of Economic Sanctions

In the wake of the full-scale war by Russia on Ukraine, and with the more aggressive rhetoric by China regarding Taiwan, the use of sanctions has been the subject of some discussion. [...] The aim could be to force Russia to withdraw from Ukraine, to make it more difficult for Russia to conduct the war, to increase the cost of the war for Russia, to impose costs on the Russian population so that they might put pressure on their leadership to stop the war, to signal to Russia that the EU strongly disapproves of the war, and so on. [...] Here one needs to distinguish between the effects on the sanctioned country, both in terms of the foreign policy objectives and the economic impact on the country, from those on the sanctioning country. [...] A detailed analysis of sanctions from 1950 to 2022 found that the number of sanctions that met their stated objectives increased until the mid-1990’s after which time the share of sanctions that were deemed to have been successful dropped significantly, with on average 42% of sanctions being deemed successful over the full period6. [...] A study of the impact on Danish firms of sanctions on 62 countries found that the impact on firms is very heterogenous depending on sanction type, countries sanctioned, and the stated objective of the sanctions9.