The use of economic sanctions against the Russian Federation have dominated headlines since the start of the Ukraine Crisis. In that time, they have had a distinct and damaging effect on the Russian economy. The Russian economy has had limited growth since the implementation of sanctions, and the International Monetary Fund estimates that as much as 100 billion dollars in capital will have left the country by the end of 2014. The stock market is down, as is foreign investment, and the threat of new sanctions opens the potential for more economic plight.
The European Union projects that its unilateral sanctions will impose significant cuts on Russian growth rates in the coming years, with the impact increasing year by year, potentially cutting it by 1.1% in 2015. This effect is notably independent of multilateral sanctions imposed by other nations, to include the United States, Canada, Japan, and others. The EU even projects a higher level of capital flight than the IMF, reaching 120 billion dollars by the end of the year.
Though the Russian economy has suffered damages, however, it is worth noting that the imposed sanctions have had little to no effect in achieving the assumed aim, which is deterring the country from meddling in Ukraine. Such sentiments have been noted even by the incoming EU foreign policy chief, Federica Mogherini. This lack of influence on Russia draws into question the applicability and utility of economic sanctions as a tool of international relations, and would seem to imply that another alternative is necessary.
Indeed, it would seem to be a general trend in the case of international economics for sanctions to have little effect. Political scientists such as Daniel Drezner have studied the matter extensively and reached some remarkable conclusions. While the use of sanctions since 1990 has increased dramatically, very few of these regimes have had the desired effect. As stated in the indicated article, some scholars have identified only 5% of economic sanctions succeed. This dichotomy further raises the question of what purpose sanctions serve, if they have not been successful historically, and are not successful now against Russia.
However, most scholarly analysis does not take into account circumstances in which sanctions were threatened, and only look at imposed sanctions regimes. Drezner suggests that the use of sanctions may actually be more effective in the threat than in the actual implementation. As the general success of sanctions use does not take this into account, the claimed effectiveness proportion of 5% is very misleading. In fact, there is significant evidence that many disputes in which sanctions were either threatened or imposed, the majority of disputes were resolved before those sanctions were imposed.
In analyzing sanctions as a tool of statecraft, the utility of the threat is worth considering. Still, the actual imposition of sanctions has been shown to have minimal effects at actually coercing a state to change its behavior, as the case with Russia has demonstrated so recently. The question arises as to why nations like the United States or organizations like the European Union should impose sanctions if their actual effect is unlikely to succeed. The answer to this is simple: to send a costly signal to back up the threat.
The sanctions regime in place against the Russian Federation is very costly, as has been duly noted. It is this highly visible damage that gives credence to the threat of the sanction, and allows it to be effective. A nation that seeks to go against the flow of international relations can see the damages dealt to the Russian economy, and can easily imagine the kind of disaster that might be imposed on their country. Thus, it is necessary that damaging sanctions be implemented, even if they do not have the desired outcome of deterring a state’s behavior.
Given the notion that the threat of sanctions may be more effective than their actual use, is it worth imposing sanctions against Russia? There may be little chance that the state’s behavior will change, but does the threat to other nations justify their use in this case?