Foreign policy/Economic Analysis-'Sanctions' good intentions bad policy?
JPR and everyone:
Here is a rather interesting look at 'sanctions' and its effects or lack thereof. The speaker seems to imply sanctions as a foreign policy tool as it is applied at the moment is less effective in achieving the intended goals.Intersting I must say.
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[Source:Institute for Intl Economics-For Private use only]
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US ECONOMIC SANCTIONS:GOOD INTENTIONS, BAD EXECUTION
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Statement by
Jeffrey J. Schott
Senior Fellow Institute for International Economics.
Before the Committee on International Relations
US House of Representatives
June 3, 1998
RELATED BOOKS
FROM THE INSTITUTE:
Economic Sanctions Reconsidered
by:Kimberly Ann Elliot, Gary Clyde Hufbauer, and Jeffrey J. Schott
Economic Sanctions in Support of Foreign Policy Goals
by:Kimberly Ann Elliot, Gary Clyde Hufbauer, and Jeffrey J. Schott
I appreciate the opportunity to come before the Committee again to discuss the use of economic sanctions in pursuit of important US foreign policy objectives. I commend the Committee for the timeliness of these hearings, and trust that its objective analysis of overall US sanctions policies will balance the political fervor surrounding events in South Asia and the recent US-European Union sanctions agreement.
US sanctions policy needs reform. Too often our laudable goals are ill-served by our unilateral attempts to coerce changes in policies or practices of foreign governments; too often the economic impact of our sanctions is offset by alternative suppliers of goods and capital whose governments agree with our goals but not the tactics to achieve them; and too often we do not plan for the reconstruction of sanctions-weakened economies in the infrequent cases when our sanctions succeed or when they are abandoned.
Congress and the Administration both share blame for legislation and executive action that often fail to advance US policy goals. Legislative mandates seek to provide global US leadership in foreign affairs but too often breed discord among our allies and thus inhibit the cooperation needed to effectively pressure targeted regimes. Sanctions are sometimes implemented in an arbitrary and/or haphazard manner, particularly when we have cross-cutting and sometimes conflicting goals in our relationship with the targeted regime.
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In my statement today, I cannot do justice to all the complex issues before this committee regarding US sanctions policies. I will briefly discuss why we use sanctions, why we use them more frequently and less and less effectively, and why we need to better match the costs of sanctions to US economic interests with the foreign policy benefits we can reasonably expect to achieve. I will conclude with some suggestions for policy reform.
Like Under Secretary Eizenstat, I am well into my third decade of work on economic sanctions: I have worked on sanctions cases as a Treasury Department official in the Ford, Carter, and Reagan administrations, and I have written extensively about sanctions policies at the Institute for International Economics...........
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Why We Use Sanctions
Economic sanctions are an important tool of US foreign policy. Sanctions are deployed as part of the overall US policy response to objectionable actions of foreign governments and to advance laudable US policy goals: to stop military adventures, arms proliferation, support of terrorism and drug trafficking, and human rights abuses among others.
In conjunction with diplomacy and other measures, sanctions seek to demonstrate US resolve and express outrage, change the behavior of the target country, and deter other countries from resorting to similar actions in the future. ....................
Accordingly, sanctions should be designed to fit the specific objectives of each case. "One size does not fit all": US interests vary widely from case to case, and sanctions need to be directed in a way that affords maximum influence on the target regime.
Sanctions provide a middle road response between diplomacy and military action. Note, however, that in recent years the use of economic sanctions has increasingly become a "way station" to the use of military force. Ineffective sanctions have led to US military intervention in Panama, Haiti, Somalia, and Iraq (and the use of US air power against Libya and in the Balkans)-...............
Increasing Use/Declining Success
As indicated in the attached charts, the number of ongoing sanctions cases has grown steadily over time. The United States has instituted new sanctions cases more often in the 1990s than in previous decades. By our count, the United States is currently engaged in more than 30 cases (both unilateral and with other allies) where US trade and/or finance is being restricted in pursuit of specific foreign policy objectives.
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Successful cases have become increasingly rare as globalization has made it easier for target countries to tap international trade and capital markets and find alternative suppliers of goods and capital.1 The success rate for US sanctions cases (both unilateral and multilateral) has declined sharply from the early postwar period.....
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The current cases with India and Pakistan illustrate this point. The threat of US sanctions did not deter them from testing nuclear weapons, even though the potential cost to Pakistan could be significant. Why? Both countries stated that they had fundamental national security interests at stake which outweighed the possible adverse economic effect of sanctions. Moreover, judging from recent experience, these countries may have felt that the US measures would not be emulated by other countries, and even if some did follow suit, their actions would be short-lived for both political and humanitarian reasons.
So far, the economic repercussions have been modest. Several European countries have rejected sanctions in part because they dislike the heavy-handed way that the United States has sideswiped their own firms (e.g., Helms-Burton and Iran/Libya Sanctions). Japan has frozen aid, but usually restores the funds when relations normalize after a "decent interval". US sanctions will punish the proliferators (Pakistan more than India) but pose little deterent to other countries that might consider similar tests. In short, the sanctions likely will fail to fulfill US policy goals.
Costs to US Firms and Workers
One main function of economic sanctions is to inflict damage on the target country as a means of coercing compliance with our policy goals. However, firms and workers in the United States also pay an immediate price when trade and financial relations are disrupted. ................<delete>...............................
Recent research by my colleagues at the Institute for International Economics calculated the impact of US sanctions on trade, jobs, and wages in the United States.3 They found that US exports to the 26 countries subject to US sanctions in 1995 were $15 to $19 billion lower than they would have been in the absence of the sanctions; ............<deleted>.............................
Moreover, if the sanctions impose significant costs on US interests without the promise of practical results, domestic political support for the maintenance of the US sanctions policy will likely erode over time. .................<deleted>.......................
Simply imposing costs on the target country may satisfy a thirst for retribution, but it does not necessarily achieve US foreign policy goals. Sanctions are blunt policy tools that are easily circumvented. Targeted regimes often adapt to sanctions, even if their people suffer. Meanwhile, ongoing sanctions become increasingly burdensome to US firms and workers.
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In short, the international backlash against these two sanctions laws has reduced the prospects for achieving the US policy goals in the target countries and has impeded efforts to build international sanctions coalitions in other cases. .................
Policy Reform: First Steps
Despite all the problems cited above, we can't simply say, "Sanctions don't work, so don't use them". We must have an available government response to foreign outrages between diplomacy and military force.
When we use sanctions, however, they should be designed to better match their costs with their anticipated results. ...........
First, we should learn from our disputes with Europe regarding tactics for using sanctions and institute a permanent G-7 sanctions group. ................................
Second, we need to guard against using sanctions to implement a "foreign policy on the cheap". Sanctions laws do not have a direct budgetary impact, and thus often receive less scrutiny than foreign assistance programs that require budget appropriations...............
In sum, we need to employ "smarter sanctioners" to assess when and where sanctions can be productively deployed. We need to better match US measures with anticipated results. We need to reintroduce positive incentives as part of our policy arsenal to encourage compliance with our goals. .............................
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