Targeted Sanctions and Redistribution

• In Event: Economic Sanctions and Global Business

Abstract

Can targeting economic sanctions at elites make sanctions more effective while reducing sanctions’ collateral costs on the broader nonelite population? This paper presents a formal model that demonstrates that the ability to achieve either of these goals with targeting is conditional on a sanctioned state’s capacity to redistribute. When sanctions target elites, elites have an incentive to increase redistribution from nonelites to compensate themselves for their losses. If sanctions targeting entails a trade-off between the aggregate costs of a sanction and the degree to which those costs are absorbed primarily by elites, then targeted sanctions will only be more effective when domestic redistribution is costly for the sanctioned state, constraining their ability to enact these compensatory measures. Furthermore, when comparing targeted and untargeted sanctions that produce the same aggregate costs, nonelites are always worse off when targeted sanctions are used; the redistributive responses to targeting imposed by elites ultimately harm nonelites more than broader-based sanctions would have. The implications of the model are explored through an examination of redistributive responses to sanctions used in Russia, Venezuela, Iran, and North Korea; redistributive responses to targeted sanctions are evident in all of these cases, but their extent and character varies depending on each state’s capacity to redistribute.

Author

• Jason Sanwalka Davis, Florida State University