The Microfoundations of Economic Sanctions 41 lost assets.With regard to aid,then,the issue is whether the target can find a new benefactor.This will depend largely on the existence of an adversary of the sender state which hopes to displace its influence in the target.The robustness of asset seizures depends on the ability of the home state to hold on to those assets,either in a physical sense,or,and often more im- portantly,in a legal sense.19 Differentiating economic sanctions is useful because the various instru- ments of coercion have distinct characteristics.As a result,specific tech- niques are not uniformly better or worse than others.Rather,their attrib- utes provide information about what type of sanction(if any),will represent the optimal policy instrument given the goals and constraints associated with each particular case.Some of these characteristics are summarized in Table 1. Table 1 节 CHARACTERISTICS OF ECONOMIC SANCTIONS BY TYPE Aid good for signaling,positive sanctions 5 Assets public,no market reaction,legally complex Finance can be informal,limited market circumvention Money fast,can be secret;effect may fade over time reyueyS] Trade slower,market incentives to undermine;durable effect 6 papeojuMoc DISAGGREGATING THE TARGET THE GREATEST CHALLENGE to sanctions often comes not from the failure of such measures to have an economic effect,but from the failure of that economic effect to translate into the desired political outcome.This has been largely unappreciated in the sanctions literature.20 The problem derives from the most costly error resulting from the study of sanctions in an aggregate sense:the treatment of the target as a unitary actor.Although 19.See,for example,C.H.De Pardicu,"The Carter Freeze Order:Specific Problems Relating to the International Monetary Fund";and Hannes Schneider,"Problems of Rec- ognition of the Carter Freeze Order by German Courts,"both in Neate,The Carter Freeze. 20.An important exception is David Rowe,"Surviving Economic Coercion:Rhodesia's Responses to International Economic Sanctions"(Ph.D.diss.,Duke University,1993)
The Microfoundations of Economic Sanctions 41 lost assets. With regard to aid, then, the issue is whether the target can find a new benefactor. This will depend largely on the existence of an adversary of the sender state which hopes to displace its influence in the target. The robustness of asset secures depends on the ability of the home state to hold on to those assets, either in a physical sense, or, and often more importantly, in a legal sense.19 Differentiating economic sanctions is useful because the various instruments of coercion have distinct characteristics. As a result, specific techniques are not uniformly better or worse than others. Rather, their attributes provide information about what type of sanction (if any), will represent the optimal policy instrument given the goals and constraints associated with each particular case. Some of these characteristics are summarized in Table 1. Table 1 CHARACTERISTICS OF ECONOMIC SANCTIONS BY TYPE Aid good for signaling, positive sanctions Assets public, no market reaction, legally complex Finance can be informal, limited market circumvention Money fast, can be secret; effect may fade over time Trade slower, market incentives to undermine; durable effect DISAGGREGATING THE TARGET /-piHE GREATEST CHALLENGE to sanctions often comes not from the failure X of such measures to have an economic effect, but from the failure of that economic effect to translate into the desired political outcome. This has been largely unappreciated in the sanctions literature.20 The problem derives from the most costly error resulting from the study of sanctions in an aggregate sense: the treatment of the target as a unitary actor. Although 19. See, for example, C. H. De Patdieu, "The Carter Freeze Order: Specific Problems Relating to the International Monetary Fund"; and Hannes Schneider, "Problems of Recognition of the Carter Freeze Order by German Courts," both in Neate, The Carter Freeze. 20. An important exception is David Rowe, "Surviving Economic Coercion: Rhodesia's Responses to International Economic Sanctions" (Ph.D. diss., Duke University, 1993). Downloaded by [Shanghai Jiaotong University] at 02:27 24 June 2013
42 SECURITY STUDIES 6,no.3 it may often be useful to model them as such,states are not unitary eco- nomic actors.This is of fundamental importance for potential senders of economic sanctions,because not only do specific sanctions feature distinct attributes,but they also affect groups in society differentially.The success of sanctions depends not on their impact on the target economy as a whole, but on the extent to which the right groups are hurt.Thus sanctions which reduce overall GNP by 5 percent may be less effective,in the same effort, than a different set of sanctions which reduce GNP by 2 percent.Identifying and targeting the right groups is the key to maximizing the chances that sanctions will be successful. There are two sets of actors in the target economy which should be identified for maximum pressure.These are the central government,and the core groups whose political support allows the regime to remain in power.Since central governments will have distinct vulnerabilities,and core groups will differ from case to case,this again underscores the need to un- derstand the microfoundations of economic sanctions in order to introduce 节 them successfully.It should not be forgotten that the goal of sanctions is to get a state to change its behavior.Pressure on these two sets of actors rep- resents direct and indirect methods of accomplishing this goal.Direct pres- 5 sure on the central government gives elites incentives to changes policies. Pressure on core support groups creates indirect incentives by motivating Suojoelf those groups to pressure the government to change course,and by raising fears that dissatisfaction among such groups will cause them to conclude that their interests can be better served under new leadership.21 21325l There are three principal mechanisms through which these pressures can bring about political change.First,pressure on the government and core B support groups can force the target to yield to the will of the sanctioning state through a straightforward cost-benefit calculus.Second,such pressure papeoluMod can lead to the overthrow of the existing regime-either because targeted sanctions have weakened the central government and its allies vis-a-vis their adversaries,or because those sanctions have driven a wedge between the government and its core constituency,leading the latter to withdraw their support for a particular administration while attempting to preserve the privileged status of an underlying political coalition.Third,and most subtly, the sanctions can have differential effects within the central government and cros core groups themselves,shifting the balance of political power within the government and altering its preferences. 21.On the relationship between destabilization,change in government,and subsequent accommodation,see Richard Stuart Olson,"Economic Coercion in World Politics:With a Focus on North-South Relations,"IP orld Politics 31,no.4 (July 1979):471-94,esp.490
42 SECURITY STUDIES 6, no. 3 it may often be useful to model them as such, states are not unitary economic actors. This is of fundamental importance for potential senders of economic sanctions, because not only do specific sanctions feature distinct attributes, but they also affect groups in society differentially. The success of sanctions depends not on their impact on the target economy as a whole, but on the extent to which the right groups are hurt. Thus sanctions which reduce overall GNP by 5 percent may be less effective, in the same effort, than a different set of sanctions which reduce GNP by 2 percent. Identifying and targeting the right groups is the key to maximmng the chances that sanctions will be successful. There are two sets of actors in the target economy which should be identified for maximum pressure. These are the central government, and the core groups whose political support allows the regime to remain in power. Since central governments will have distinct vulnerabilities, and core groups will differ from case to case, this again underscores the need to understand the microfoundations of economic sanctions in order to introduce them successfully. It should not be forgotten that the goal of sanctions is to get a state to change its behavior. Pressure on these two sets of actors represents direct and indirect methods of accomplishing this goal. Direct pressure on the central government gives elites incentives to changes policies. Pressure on core support groups creates indirect incentives by motivating those groups to pressure the government to change course, and by raising fears that dissatisfaction among such groups will cause them to conclude that their interests can be better served under new leadership.21 There are three principal mechanisms through which these pressures can bring about political change. First, pressure on the government and core support groups can force the target to yield to the will of the sanctioning state through a straightforward cost-benefit calculus. Second, such pressure can lead to the overthrow of the existing regime—either because targeted sanctions have weakened the central government and its allies vis-a-vis their adversaries, or because those sanctions have driven a wedge between the government and its core constituency, leading the latter to withdraw their support for a particular administration while attempting to preserve the privileged status of an underlying political coalition. Third, and most subdy, the sanctions can have differential effects within the central government and across core groups themselves, shifting the balance of political power within the government and altering its preferences. 21. On the relationship between destabilization, change in government, and subsequent accommodation, see Richard Stuart Olson, "Economic Coercion in World Politics: With a Focus on North-South Relations," World Politics 31, no. 4 (July 1979): 471-94, esp. 490. Downloaded by [Shanghai Jiaotong University] at 02:27 24 June 2013