The Sanctions Paradox

 /  Feb. 22, 2017, 9:51 a.m.


Punishment seems to be the natural remedy to crime. In order to deter those with criminal intent, we create the threat of punishment; however, not all punishment is effective. By all measures, it seems that the sanctions against Russia were a success: the Russian ruble has lost half its value against the dollar, and the Russian economy is in freefall. However, the sanctions have completely failed to achieve the political goals that they were meant to. The sanctions were supposed to coerce Putin into relinquishing Crimea and punish his support for separatists in Eastern Ukraine. Today, Crimea is a republic of the Russian Federation and fighting continues to rage on in Eastern Ukraine. Perhaps this is because the sanctions aren’t actually that effective. After all, unemployment has stayed low in Russia at just 5.8 percent in 2016, and even the State Department admits the main reason for Russia’s economic woes is the collapse in oil prices, which have had such a massive impact because oil and gas account for a whopping 43 percent of Russian government revenues. But there is another possible explanation: sanctions create incentives for Putin to continue, or even increase, his aggression.

In 2011 there were massive protests against the Russian elections. The advent of social media meant that the busing in of Putin supporters and other forms of election rigging were video-taped and became a national scandal. Tens of thousands of people took to the streets and Putin’s power was threatened for the first time. After several months and significant government suppression, the protests died down, but their threat persisted. No autocrat wishes to contend with the possibility of being overthrown by the populace, and Putin is no different. He sought ways to preserve his power and credibility in the face of challenges to them. The emergence of the Ukraine crisis, with all of its international implications, provided a key opportunity for Putin to solidify his authority, and it worked magnificently.

The rally-round-the-flag effect is a well-documented phenomenon in which support for the government in power massively increases during a crisis. The Russian population’s response to the Ukraine crisis follows this model perfectly. Support for Putin increased by 20 percent from October 2013 to August 2014. The Russian public’s distaste for the West also skyrocketed as the percentage of the population with a favorable view of the US dropped from 51 to 15 percent, and those with a favorable view of the EU dropped from 63 to 31 percent.

The fact that Putin is utilizing the rally-round-the-flag effect with great success ought to inform the Western powers of the failure of their response to the Ukraine crisis, but there is no indication of such recognition. The sanctions have remained in place despite the fact that they create perverse incentives for Putin. He continues to face off against the West in order to maintain popular support to offset the damage done to his popularity by the worsening economic situation. Sanctions provide the government with an easy scapegoat, and evidence shows that Russian people buy into it: more Russians believe sanctions are a leading cause of harm to the economy than government policy. Nor have economic sanctions undermined confidence in Putin and his government: the most recent polling shows that confidence in Putin’s handling of international affairs is actually at an all-time high.

Western leaders should already have known that the history of economic sanctions shows they are not effective. Sanctions have failed to coerce Baathist Iraq, Communist Cuba, and apartheid South Africa, to name a few examples. The effectiveness of sanctions against Iran seems to provide the best case that sanctions can succeed though even this case is unclear and a potential outlier. The sanctions did hit the Iranian economy, but they were uniquely harsh. Unlike the Russian economic sanctions, the sanctions against Iran passed through the UN, and India and China cooperated with them, leaving Iran with nowhere to turn. It’s also unclear that the sanctions were what caused Iran to rethink its nuclear program. The program was in its infancy at just 164 centrifuges when sanctions began in 2006 and grew to nineteen thousand centrifuges during the sanctions in order to give Iran the bargaining power to have the sanctions lifted. So it seems that the sanctions encouraged Iran to further develop its nuclear program to gain leverage at the negotiating table, not halt it. The reality is that sanctions as a strategy grossly underestimate the ability of states to adapt to economic pressure and overestimate the importance of the economy in comparison to policy goals. There is no real evidence to suggest they have worked or will do so in the future.

It is also important to note that the economic sanctions have affected people, just not the Russian government. In Brussels, thousands of farmers affected by Russia’s counter-ban on European food imports have protested against the EU. Normal citizens, rather than the Russian government, pay the price for Russian aggression. Across Europe, there have been economic costs to the sanctions, which hurt working class people struggling to get by. Even if there have also been costs to Russia and to Putin’s inner circle, they are not and will not be enough to effect some sort of change in the political situation. So why are we sanctioning them?

The image featured in this article is licensed under Creative Commons. The original image can be found here.

Samuel Leiter, EUChicago


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