What the political economy literature tells us about blockades and sanctions

Piotr Lis, Mansoob Murshed, Sajjad Dizaji, Mahjoob Zweiri

Research output: Working paper

Abstract

financial relations imposed by one or more countries against a target country,
group, or individual for political and security policy purposes. Most existing
studies of the effects of sanctions and blockades, whether bilateral or
multilateral, are conducted from the perspective of the initiating or ‘sender’
country, which is typically a great power, e.g., the United States. However,
there is a lack of literature on the possible policies that target nations may
develop to prevent compromising their security, especially economic security,
as well as neutralize the negative impact of sanctions. Sanctions and blockades
disrupt the flow of international trade in goods, services and capital. These
have consequences for the composition of output, employment, consumption
and investment, and may also exert substantial effects on households, firms
and government expenditures in targeted nations. Thus, it is important to
understand the effects of blockades and sanctions on economic growth and
public expenditure on security, military, health and education. Apart from the
long-run growth consequences of sanctions and blockades, many of the
macroeconomic effects are likely to be relatively short-lived, decaying over
time as the economy adjusts to sanctions. Therefore, econometric techniques
applied to investigate the impact of sanctions should be able to capture the
simultaneous interplay between economic outcomes, political factors and
adjustment processes, as in reality economics and politics are inseparable
Original languageEnglish
Number of pages27
Publication statusPublished - 30 Sep 2020

Publication series

NameISS Working Paper Series
ISSN (Print)0921-0210

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    Lis, P., Murshed, M., Dizaji, S., & Zweiri, M. (2020). What the political economy literature tells us about blockades and sanctions. (ISS Working Paper Series ).