by Gary Clyde Hufbauer, Peterson Institute for International Economics
Editorial reprinted from The Washington Post
July 12, 1998
© Washington Post
Stating the obvious, President Clinton recently lamented that the United States has become "sanctions happy." Clinton, of course, is the same president who has signed laws for new punitive measures against India, Pakistan, Cuba, Iran and Libya and has used his executive powers to add to the rich legacy of sanctions inherited from past occupants of the White House.
No country in the world has employed sanctions as often as the United States has. The American infatuation with economic sanctions was sparked by President Woodrow Wilson when he was trying to sell the idea of the League of Nations to his countrymen, together with its newly crafted economic weaponry. Wilson famously declared in 1919: "A nation boycotted is a nation that is in sight of surrender. Apply this economic, peaceful, silent, deadly remedy and there will be no need for force. It is a terrible remedy." America didn't buy the League—the Senate refused to ratify U.S. membership in that precursor to the United Nations—but as the decades rolled on, America adopted Wilson's idea of sanctions as a diplomatic tool.
During this century, the United States has imposed economic sanctions more than 110 times. Economic sanctions entail the denial of customary export, import or financial relations with a target country in an effort to change the country's laws or policies. For example, the United States may block World Bank or International Monetary Fund loans in an effort to stem nuclear proliferation (India and Pakistan); or it may restrict trade with a country to change its human rights policies (Argentina, Chile and China). The current inventory of U.S. sanctions covers 26 target countries, accounting for over half of the world's population. Since the demise of the Soviet Union, Congress has felt freer to interfere in foreign policy, instructing the president on the minute details of imposing and waiving sanctions. In short, whenever tensions rise, sanctions become the favorite tonic of American diplomacy.
What have we learned from this grand experiment in the diplomatic laboratory? Quite a lot.
First, as a substitute for military force—the Wilsonian notion—sanctions seldom achieve the desired change in the conduct of foreign countries. In plain language: Wilson was wrong. Perhaps one episode in five results in discernible changes abroad that can be traced to sanctions. The most recent qualified success was the election of Andres Pastrana as president of Colombia last month, following several years of U.S. sanctions directed personally against his predecessor, Ernesto Samper. Charging that Samper had accepted $6 million from the Cali drug cartel for his 1994 presidential campaign, the United States disqualified Colombia as a recipient of U.S. aid and took the unusual step of revoking Samper's entry visa, in effect declaring him persona non grata. These steps were, of course, not the only reason for Pastrana's victory, and probably not the major reason, but they were a contributing factor. Against this qualified success must be listed many unqualified failures: Haiti, Cuba, Libya, Iran, Iraq and China, to name the most prominent.
Advocates of sanctions offer South Africa as their favorite example. Economic sanctions were not the deciding factor, but they helped pressure F.W. de Klerk to concede power to Nelson Mandela in 1994. Why doesn't the South African experience translate to Burma, Sudan, India and other miscreants? One reason is that South African sanctions were multilateral, not just a U.S. initiative. Another reason is that, even under apartheid, South Africa was semi-democratic, and the white minority cared what the rest of the world thought.
In fact, this is one of the ironies: Democratic countries, where the elite cares what the rest of the world thinks, are far more susceptible to sanctions than authoritarian countries isolated from world opinion. The contrast between Sudan and South Africa, or between Cuba and Colombia, could not be sharper. An unintended consequence of financial sanctions against Pakistan, a weak but semi-democratic state, open to world opinion, is that the penalties may help topple the government of Prime Minister Nawaz Sharif—as Pakistan slips into deep economic depression—and pave the way for a truly authoritarian and fundamentalist regime.
The second lesson from the diplomatic lab is that it is naive to think of sanctions as a substitute for force when dealing with authoritarian powers. Draconian sanctions made little difference to the policies of Manuel Antonio Noriega in Panama, Raoul Cedras in Haiti or Saddam Hussein in Iraq. Only the use of force changed the governments of Panama and Haiti, and pushed Iraq out of Kuwait. The threat of force tempered Saddam's resistance to U.N. arms inspections early in 1998. But far more often, when U.S. presidents impose sanctions, they see them as an isolated measure, not as part of an escalating "force curve"—a steady progression from diplomatic protest, to economic sanctions, to military intervention; at each step, the target country knows worse is yet to come. The result of treating sanctions as a disconnected policy measure is that the United States has acquired a well-deserved reputation for bluffing: If an authoritarian adversary can withstand sanctions, it need not fear a surprise attack.
A third lesson is that economic sanctions can inflict pain on innocent people while at the same time increasing the grip of the leaders we despise. When sanctions are applied broadside—as against Haiti, Cuba and Iraq—the hardest hit are the most vulnerable: the poor, the very young, the very old and the sick. Left unharmed, and often strengthened, are the real targets: the political, military and economic elites.
A fourth lesson is that sanctions applied hard and fast are more likely to succeed (all other circumstances being equal) than sanctions applied soft and slow. But this lesson poses a dilemma. Hard sanctions usually require multilateral cooperation, if not from the U.N. Security Council, at least from the industrial democracies. While the United States may be the sole military superpower, it is not the only economic player. Without the cooperation of Canada, Western Europe and Japan, the United States alone cannot deny a target country key imports, critical markets or vital finance. So the prescription for hard sanctions—sanctions with both economic and moral effect—amounts to a caution against going it alone. On the other hand, multilateral cooperation takes time to arrange, and often is unachievable. Quick U.N. sanctions against Iraq in 1990 were a notable exception; more typical was the measured international response to India's recent nuclear weapons tests.
Another dilemma posed by the "hard and fast" lesson is that in circumstances where sanctions alone have the best chance of success—against societies that are semi-democratic and open to world opinion—it goes against the American spirit to pile on. Instead, we prefer to escalate sanctions slowly so as to give leaders of the target countries time to reconsider. This tactic also gives them time to take evasive measures.
So why not just muddle along with our sanctions policy? After all, in the view of many American officials, the United States has a special responsibility to deal with misdeeds in many places, ranging from religious persecution in Russia and China to despots in Cuba and Burma. But since military force is too costly and diplomacy is too feeble, why not apply economic sanctions as the global salve to problems abroad and consciences at home? Why not drink the marvelous tonic of foreign policy on the cheap?
The reason, again to quote President Wilson, if not in the sense he intended, is that sanctions are a "terrible remedy." Start with the domestic costs. Estimates made by Kimberly Elliott, Jeffrey Schott and myself indicate that economic sanctions in place today cost the United States some $20 billion in lost exports annually, depriving American workers of some 200,000 well-paid jobs. It would be one thing if these costs were compensated from the public purse, so that everyone shared the burden; it is quite another when the costs are concentrated episodically on individual American firms and communities.
Then consider the morality. U.S. economic sanctions, along with Fidel Castro's own mismanagement, have helped close the income gap between Haiti and Cuba—by driving Cuban living standards downward toward the desperate Haitian level. Speaking of Haiti, that blighted economy has yet to recover from penalties imposed by the first Clinton administration. The multitudinous poor in Iraq, Iran and Vietnam are that much more miserable thanks to prolonged sanctions. With a little resolve, we could also worsen the lives of Nigerians, Indonesians and Burmese. Pope John Paul II had a point when he said during his visit to Cuba in January that the effects of economic sanctions are "always deplorable, because they hurt the most needy"—in effect, that ordinary Cubans, not Castro and his inner circle, are paying the price. The same would happen in these other ill-governed countries.
Finally, the liberal application of sanctions to every cause and country badly erodes U.S. leadership. When the United States applies sanctions to half the world's people, and when it imposes secondary sanctions on allies and friends, it prompts a reaction against American hegemony. Sanctions against China have neither shaken the leadership nor hindered the country's drive for growth. Sanctions against India will have approximately the same lack of effect. And few secondary sanctions do more than irritate U.S. allies. (Americans, above all, should understand symbolic offenses. The British tea tax imposed no real economic hardship on colonial Boston. It did inspire a revolution against the greatest power of the day.)
Recovery from this love affair will require decisive steps by the White House and the Congress. Clinton appears ready to start the cure, but much more needs to be done. Passage of the sanctions reform bill, introduced last fall by Sen. Richard Lugar (R-Ind.) and Reps. Lee Hamilton (D-Ind.) and Phil Crane (R-Ill.), would be a useful next step. This bill seeks "to establish an effective framework for consideration by the legislative and executive branches of unilateral economic sanctions." It proposes several sensible guidelines when economic sanctions are considered, either by the president or Congress.
The procedural reforms include increased executive branch consultation with Congress, public hearings, a cost-benefit analysis, a preference for targeted and multilateral measures whenever possible, presidential waivers for all legislatively imposed sanctions and sanctity of contracts. If passed, Hamilton-Lugar would be a landmark law.
But additional steps are still needed:
'A Terrible Remedy'
Ongoing foreign policy sanctions, defined as the "deliberate, government-inspired withdrawal, or threat of withdrawal, of customary trade or financial relations," have been imposed either multilaterally or by the United States on the following nations:
|Target Country||Initial Year||Type of Sanctions||Precipitating Event||Key Changes to Sanctions|
|Angola||1993||Limited trade restrictions (arms and oil embargo); Air and travel sanctions||Failure to implement peace agreement||Air and travel ban (1997); Ban on UNITA diamond exports (1998)|
|Azerbaijan||1992||Restrictions on financial assistance (including Overseas Private Investment Corp.)||Embargo of Armenia over Nagorno-Karabakh|
|Burma||1988||Restrictions on aid (including U.S. Export-Import Bank, OPIC), travel restrictions, Ban on trade preferences, Investment ban||Repression of political opposition||Massachusetts state sanctions (1996), Ban on new U.S. investments (1997)|
|Cambodia||1992||Limited trade restrictions (log boycott; oil embargo)||Failure to implement peace agreement; repression of opposition||Aid reductions (1997)|
|Cameroon||1992||Restrictions on aid||Repression of opposition|
|China||1989||Restrictions on financial assistance, Exim, OPIC;
Limited export restrictions
|Tiananmen Square massacre||Limited export restrictions (1991)|
|Cuba||1960||Comprehensive trade and financial sanctions;
Secondary sanctions to inhibit foreign investment
|Castro-led takeover; military interventions in Africa (1980s); Repression of opposition||Cuban Democracy Act restricts trade of U.S. subsidiaries abroad (1992) |
Helms-Burton bill codifies embargo; adds secondary sanctions against third-country investors in Cuba (1996)
|Gambia||1994||Restrictions on aid||Military coup|
|Haiti||1997||Restrictions on aid||Political instability|
|India||1998||Ban on financial assistance,including Exim, OPIC;
Limited trade restrictions;
Ban on bank loans to government;
Postponement of non-humanitarian official, multilateral lending
|Nuclear weapons tests|
|Indonesia||1991||Military aid restrictions; Ban on arms sales||Political repression, especially in East Timor|
|Iran||1984||Comprehensive trade and financial sanctions; Secondary sanctions to inhibit foreign investment||Support for terrorism, opposition to peace process in Middle East; efforts to acquire weapons of mass destruction||Limited export restrictions (1984) |
Import boycott added (1987)
Total export embargo (1995)
Iran-Libya Sanctions Act adds secondary sanctions against foreign firms investing in oil sector (1996)
|Iraq||1990||Comprehensive trade and financial sanctions,except limited oil sales under U.N. oil-for-food program||Invasion of Kuwait; post-wardiscovery of extensive program to acquire weapons of mass destruction|
|Liberia||1992||Arms embargo||Civil war|
|Libya||1978||Comprehensive trade and financial sanctions; Air travel ban||Gadhafi regime support for terrorism; bombing of Pan Am Flight #103||Limited U.S. export restrictions (1978) |
U.S. boycotts Libyan oil (1982)
U.S. imposes comprehensive sanctions (1986)
U.N. imposes limited trade sanctions; air travel ban (1992-93)
Iran-Libya Sanctions Act adds secondary sanctions against foreign firms investing in oil sector (1996)
|Niger||1996||Restrictions on aid||Military coup|
|Nigeria||1993||Restrictions on aid;U.S. bans all financial assistance, Exim, OPIC;Restrictions on arms sales;Travel restrictions||Abrogation of election results; execution of Ken Saro-Wiwa, other dissidents|
|North Korea||1950||Comprehensive trade and financial sanctions||Korean War; possible acquisition of nuclear weapons||U.N. threatens trade and financial sanctions to forestall nuclear weapons acquisition (1993-94)|
|Pakistan||1979||Ban on financial assistance,OPIC, Ex-Im, export credit guarantees;
Ban on bank loans to Pakistan's government;
Postponement of non-humanitarian loans
|Nuclear weapons program; nuclear weapons tests||U.S. imposes limited sanctions (1979) |
U.S. waives sanctions during Soviet intervention in Afghanistan (1980s)
U.S. expands sanctions; G-8 imposes limited sanctions (1998)
|Somalia||1992||Arms embargo||Civil war|
|Sudan||1988||Comprehensive trade and financial sanctions||Civil war and human rights abuses; support for terrorism||Aid sanctions (1988-89) |
Comprehensive sanctions (1997)
|Syria||1986||Ban on U.S. assistance,including Ex-Im, OPIC; Limited trade restrictions||Support for terrorism|
|Vietnam||1954||Denied most-favored-nation status||Vietnam War and aftermath; personnel missing in action||Total trade embargo lifted; other restrictions remain (1994)|
|Yugoslavia||1991||Comprehensive trade and financial sanctions||Civil war in Bosnia; implementation of Dayton agreement ending Bosnian war; intervention in Kosovo||U.N. trade sanctions lifted, restrictions on multilateral lending, other limited sanctions remain (1995) |
Additional sanctions imposed against Serbia over Kosovo (1998)
|Zaire||1990||Restrictions on aid||Mobutu corruption and suppression of opposition; continued repression under Kabila regime||Sanctions continued after Kabila takeover (1998)|
|Zambia||1996||Restrictions on aid||Repression of opposition, human rights violations|
SOURCE: Institute for International Economics
© Copyright 1998 The Washington Post Company
Paper: Case Studies in Economic Sanctions and Terrorism
Revised June 2012
Policy Brief 01-11: Using Sanctions to Fight Terrorism November 2001
Working Paper SPECIAL: US Economic Sanctions: Their Impact on Trade, Jobs, and Wages April 1997
Policy Brief 98-4: Sanctions-Happy USA July 1998
Peterson Perspective: Legislation to Sanction China: Will It Work? October 7, 2011