A Mix of Foreign Aid and Sanction: When to Use and Why?

• In Event: Economic Instruments and Foreign Policy

Abstract

Economic sanctions and foreign aid are two popular foreign policy tools that have been utilized by states. Interestingly, in some cases, senders utilized both foreign aid and economic sanctions simultaneously. Despite a mix of these seemingly incompatible strategies, few studies have explored the nexus and its driving forces. Do they substitute (Clark and Reed 2005; Palmer, Wohlander, and Morgan 2002) or complement (Early and Jadoon 2016; Hwang and Hwang 2023) each other? How to account for the variations across different cases? By examing internal and external factors that account for the employment of the two foreign policy tools, this paper addresses these questions. We argue that a sender’s strategic interests to maximize its chance to achieve a policy goal in a target with weak political leadership are one of the key factors that drive the mix of the two policies. The argument and findings of this paper make significant contributions to the literature on economic sanctions, foreign aid, and foreign policy substitution.

Author

• Wonjae Hwang, University of Tennessee