What's the Point of Sanctions?

The Underrated Power of Pain in International Relations

In international relations, the yardstick by which efforts are measured are in their success in either compellence or deterrence. To be clear about definitions, compellence (or coercion) is the process of getting your opponent to do something they would otherwise not have done whereas deterrence is getting them to not do something they otherwise would have liked to have done. 

Sanctions stood little chance of coercing Russia to abandon Crimea in 2014 and failed in 2022 to deter them from their invasion. Equally, in the wake of the failure of the Iran Nuclear Deal, sanctions are extremely unlikely to compel the regime to return to the framework. Nor is the threat of further sanctions likely to deter it from seeking nuclearization. As a result, many have questioned whether there’s a point to sanctions. In my opinion, the focus on coercion is particularly misguided when discussing sanctions.  Their usefulness is in deterrence and outright harm.

Compellence and deterrence are both useful concepts. However, I believe the focus on them can obscure another important dimension relevant to sanctions: that of harm. While you may not be able to compel or deter your opponent, you can harm them. This harm undoubtedly impacts civilians, but they are not its intended targets. The purpose is to reduce the actual and latent power of the state to act contrary to your interests. 

To begin with, let’s discuss deterrence. Sanctions clearly have at least some deterrent value. If an action will result in being sanctioned, a state must be willing to bear that cost in order to take the action. This explains why sanctions are ineffective at coercion: if a state is taking action that incurs sanctions, it is because it has decided that suffering them is worthwhile. Russia, for example, no doubt anticipated Western sanctions for its invasion of Ukraine. As such, their imposition was ineffective at changing Russian behavior; they were already priced-in to the Russian calculus. 

Deterrence is a devilishly hard thing to measure. The aim of deterrence is to prevent something from happening. You can’t exactly count all the times a war didn’t happen and determine which of those can be attributed to the threat of sanctions. Successful deterrence tends to leave little evidence of its success. 

From the Russian case we can see the logic that renders sanctions ineffective as a coercive tool. In the invasion of Ukraine there is evidence that the extent of Western sanctions actually caught the Russians off-guard. Particularly the freezing of Russian reserves appears to have been unanticipated. Yet, even this was not enough to modify Russian behavior. Since it’s cheap to impose sanctions, retreating in the face of them is costly to a state’s reputation. As a result, even if sanctions make it a bad deal, giving in to coercive sanctions is itself costly. States are willing to bear economic costs to avoid a loss of face. This ultimately reduces the effectiveness of sanctions as a tool of coercion. To be effective, not only must they cost more than a state can hope to gain through its aggression, but the cost must be so high that it outweighs the prestige costs of folding. 

States are also run by people who are susceptible to flaws in reasoning such as the sunk-costs fallacy. Even if it was objectively worthwhile to accept the loss of prestige to relieve the sanctions, there is a strong bias against that kind of action. Cutting losses is psychologically difficult in any circumstance, but all the more so when political consensus is needed to do so. 

Sanctions are therefore very useful in deterring as they can make actions costly, but are ineffective at compelling. Nevertheless, states still apply sanctions after the fact even with little prospect of success. Some have criticized this use of sanctions as quixotic, considering their unsuitability as a tool of coercion. However, there are two elements that justify the use of sanctions even if they don’t change the behavior of the state subject to them. 

For one, they strengthen deterrence. If sanctions are never applied, the threat of them becomes incredible. Even if Russia won’t cease its aggression because of sanctions, it is still worthwhile to apply them as a demonstration. Making an example of a transgressive state reinforces deterrence, even if the state itself is not coerced. Sanctions cannot stop Russia from acting against Western interests, but the West can demonstrate that costs will be imposed on transgressors and its threats are not empty. 

To our second point, if sanctions don’t affect the behavior of the target state, why would any state fear to be subject to them? After all, if Russia can continue to invade Ukraine regardless of sanctions, how can they be a credible threat? This line of reasoning leads back to the idea of costs. As discussed, states will pursue actions that are no longer materially profitable in order to avoid the prestige costs associated with succumbing to coercion. The purpose of sanctions then is to ensure that states who choose to flout international norms are weakened rather than strengthened by that choice. This may not be enough to deter the behavior, but weakening these states is a good in itself. 

The power to weaken is the most direct effect of sanctions. By limiting growth, the latent power of hostile states can be reduced. Iran and Russia have both embraced asymmetric means of struggle against American hegemony in an attempt to compensate for this, but such efforts are palliative only. Clever tactics can only take you so far against an opponent that has drastically more and higher quality means with which to pursue their interests. 

It is important to harm rogue states because these harms compound. Aside from the direct costs of Russia’s war, sanctions mean the Russian economy will fall further behind the rest of the world. A missed percentage of GDP growth cannot be easily redeemed. Every year a country is outpaced in growth by its rivals makes catching up more difficult. American GDP is ten-times that of Russia.  Economic might directly influences the military power a state can muster. Sanctions cannot stop Russia from attempting to conquer Ukraine, but they can limit the industrial base behind it and ultimately reduce the threat Russia poses to American hegemony. 

Ultimately, sanctions are poor tools of coercion, but remain exceptionally useful to deter and simply to harm. The threat of sanctions means that aggression is rarely rational from a cost-benefit perspective. States that can’t be deterred can still be weakened by sanctions, which is a worthwhile end in itself. Sanctions haven’t made Russia withdraw from Ukraine or forced Iran to give up on nuclearization. What sanctions have done is made them pay a serious price for those actions.