In recent times, economic and political tensions have risen, with different countries having conflicting interests and varying priorities. These heterogeneous beliefs and structural preferences have led to brick walls in a common interest. The fall of the diplomatic mission in resolving state-level differences has led to trade wars, financial barriers, and economic sanctions. Economic sanctions are becoming an essential policy instrument in pressing home demands and ending military assault or forcing a regime change.
Since World War I, about 189 economic sanctions (in trade, finance and others) have been imposed on the former Soviet Union, and, recently, Russia has been facing the most. The success or otherwise of these economic sanctions on the Russian state has been subjected, depending on whom you ask. The essence of sanctions differs, and the real intention is sometimes subjective, but popular orthodox belief has argued that sanctions target democratisation or regime change in sanctioned states. However, the efficacy of sanctions to force an end to military assault or regime change remains a prior unclear.
Establishing the probability of success or failure of economic sanctions for a conflict resolution tool remains inadequate and needs further investigation. Some scholars argue that economic adversity suffered by a resident of sanctioned states would induce rebellion, protest, and chaos, forcing the leaders of the sanctioned states to reconsider their position and alternate for dialogue, which leads to peace restoration. However, the channels through which these economic sanctions will induce an end to military assault or regime change remained obscured.
A better understanding of how sanctions could trigger regime change or end military assault could be viewed from past experiences with Haiti and Iraq. Evidence suggests that the targeted regimes will rather dampen economic consequences than alleviate the pressure on citizens, and this even becomes more puzzling. From 1991 through 1994, economic sanctions on Haiti and 1990 through 2003 economic sanctions on Iraq states, economic adversities faced by the residents increased, and these anticipated effects for negotiations did not occur.
The resident continues to find ways to navigate strict economic conditions that limit consumables and offer sub-optimal bundles towards maximising their welfare. The geopolitics associated with the regime change offer helpful clarifications. The political leadership of Iraq and Haiti was propagating an agenda that described how inhumane the sanctions were rather than have a meaningful effect on conflict resolution. It could also escalate tensions and set negotiation on the back foot; hence, the need for a cautious approach in using economic sanctions by the EU.
Read also: Canada slams Putin’s daughters with sanctions
We could also view the relevance of sanctions from their ability to achieve the intended target before they are abandoned. Many economic sanctions are targeted at democratisation, ending a military assault as in the Russian invasion of Ukraine and regime change, if possible. Evidence has also shown that past sanctions were abandoned when the intended objectives had not been realised.
As in Hufbauer et al. (2007), only 12 episodes of economic sanctions were adjudged to be partly successful from a total of 57 through the period 1915-1999. Sanctions could either be lifted or abandoned when priorities change, even when the intended goal is yet to be realised. It raises questions as to why a sanctioning state abandons their position when the intention has not materialised. It is about politicising, and this contrast to dignity and respect deserved by Ukrainian life has been lost.
It is essential to note that challenging a sanctioned state to come into democratisation, end a military assault or force a regime change comes at an economic cost. The combined military aid of the United States to Ukraine and the EU to Ukraine has surpassed $5 billion. These vast funds used in piling weapons, splurging on militarism, and threatening to engage in all-out economic and financial war have secondary usage or opportunity costs. The economic cost to the sanctioning states is enormous, and this needs to be reconsidered.
It turns out that this simple framework offers an intuitive explanation for both of the observations outlined above. At the heart of this explanation is that the incumbent elite may use the supply of public goods as a defence tool, an aspect that has been neglected. To see how this works, consider a country that has just been placed under a sanctions regime. As intended, applying economic pressure makes a switch to democracy more rewarding to ordinary citizens.
The sanctions regime thus renders a previously reluctant citizenry more inclined to revolt. Nevertheless, this is exactly what the ruling elite wants to prevent, as the consequences of a revolt would be more damaging than an orderly exit, which requires time to organise. To buy this time, the elite has to discourage any challenges from the citizenry by making challenges more costly, and a straightforward way to do so is to decrease the supply of public goods. With a lower level of public goods, the citizens’ incomes are lower, and as a consequence, a given cost associated with a revolt translates into a more extensive loss in terms of instantaneous utility.
But not only ordinary citizens fare badly. The situation for the ruling elite deteriorates as well because the economy generates less output due to the sanctions and the elite’s own defence strategy. So, if the sanctions’ intensity is sufficiently high, the elite looks for a suitable exile opportunity and leaves as soon as such an opportunity arises, thereby turning the sanctions episode into a success.
On the other hand, if the actors learn over time that no such opportunity exists, the elite prefer to stick to its successful defence strategy indefinitely. In this case, the episode ends in failure because the sanctioning body prefers to lift the sanctions as it does not want to harm the general population without improving the prospects of democratisation.
Dr Ibrahim A. Adekunle is a lecturer at the Babcock Business School, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
