Instrument Choice and the Effectiveness of International Sanctions: A Simultaneous Equations Approach
| Date | 01 September 2003 |
| Author | Anton D. Lowenberg,Chao Jing,William H. Kaempfer |
| DOI | 10.1177/00223433030405002 |
| Published date | 01 September 2003 |
| Subject Matter | Journal Article |
519
Introduction
There is by now a thriving literature that
attempts to deal with the question of what
makes for a successful episode of inter-
national economic sanctions. That is to say,
what factors are important in determining
whether or not sanctions are effective in
© 2003 Journal of Peace Research,
vol. 40, no. 5, 2003, pp. 519–535
Sage Publications (London, Thousand Oaks, CA
and New Delhi) www.sagepublications.com
[0022-3433(200309)40:5; 519–535; 035590]
Instrument Choice and the Effectiveness of
International Sanctions: A Simultaneous
Equations Approach*
CHAO JING
Department of Economics, University of Colorado, Boulder
WILLIAM H. KAEMPFER
Department of Economics, University of Colorado, Boulder
ANTON D. LOWENBERG
Department of Economics, California State University, Northridge
The literature on economic sanctions suggests that the choice of policy instrument, for example trade
sanctions, financial sanctions, or military intervention, is endogenous to the political process and, in
particular, to the policy outcome sought by the sanctioner. But the choice of instrument also affects
the outcome of the sanctions. Therefore, the sanctions policy outcome and the probabilities of the sanc-
tioner’s adoption of different sanctions instruments are jointly determined. To capture this endogeneity,
multivariate probit and logit models are estimated using data from Hufbauer, Schott & Elliott, with
the random utilities to the sanctioner of choosing military action, trade sanctions, and financial
sanctions as dependent variables. The expected probabilities of choosing these alternatives are then
incorporated as explanatory variables in predicting the success of the sanctions in attaining their political
objectives. This procedure generates simultaneous estimates of the determinants of both instrument
choice and sanctions success. The empirical results indicate that military force is less likely to be used
against an economically healthy and politically stable target than against a more vulnerable target.
However, military action is encouraged by third-country assistance to the sanctioned country and by a
high cost of sanctions to the sanctioner. Financial sanctions are more likely to be used against a target
that receives third-country support but are less likely against an economically healthy country. Sanctions
success is positively correlated with the degree of warmth in relations between sanctioner and target
prior to the sanctions; negatively correlated with the size of the sanctioner relative to the target; and
negatively correlated with the economic health and political stability of the target. There is no evidence
that third-country assistance to the target diminishes the effectiveness of sanctions or that the cost of
sanctions to either the target or the sanctioner has a strong effect on the sanctions outcome.
*We thank Robert Rider and other participants in a session
of the March 2000 Public Choice Society annual con-
ference in Charleston, SC, for helpful comments. Associ-
ate Editor Michael Brzoska and two referees also made
many useful suggestions that helped to strengthen the
article. All remaining errors are the responsibility of the
authors alone. The data used in this article can be found at
http://www.prio.no/jpr/datasets.asp. Statistical results were
generated using Gauss 4.0. Corresponding author: Anton
D. Lowenberg, anton.lowenberg@csun.edu.
02 JPR 40-5 Jing (JB/D) 23/7/03 8:39 am Page 519
bringing about their stated objectives? The
starting point for this literature is the
pioneering work done by Hufbauer & Schott
(1985) and Hufbauer, Schott & Elliott
(1990), hereafter HSE, who examine 116
sanctions episodes from 1914 to 1990 and
assign to each a success score ranging from
1to 16.1HSE consider a sanction to be
successful if its success score is greater than
eight. They find that 34% of the sanctions
episodes in their sample were successful
according to this criterion.
HSE then proceed to identify 18 poten-
tial correlates of sanctions success and, using
a multiple regression model, they test the
impact of these correlates on the sanctions
success score. However, the explanatory
power and predictive success of the HSE
model is weak (Bonetti, 1997a; Leitzel,
1987). Their regression equation explains
only 21% of the variation in success scores
and only three of the 18 coefficients used in
the equation are statistically significant. One
of the main reasons for these weak results is
that HSE employ an ordinary least squares
estimation technique that is not appropriate
in the case of a limited dependent variable
such as the sanctions success score, whose
values are constrained to fall between 1 and
16 (Bonetti, 1997a; van Bergeijk, 1994).
This problem has been addressed by various
authors using discrete dependent variables
estimators. For example, van Bergeijk (1989,
1994) uses a logit model, Lam (1990) imple-
ments both logit and probit techniques, and
Bonetti (1998) uses logistic regressions to
identify the circumstances in which high
levels of success or failure are probable.
The complex relationship between instru-
ment choice, expectations, and the behavior
of both sanctioners and target has long been
a focus of international relations and public
choice studies of sanctions. A classic
contribution to the international relations
literature is that of Galtung (1967), who
identifies the expressive as opposed to instru-
mental impact of sanctions. Lindsay (1986)
discusses the symbolism of sanctions, both in
regard to domestic and international con-
stituencies. More recently, Morgan &
Schwebach (1996) show that significant
policy changes can be induced by sanctions
that are carefully devised to impact specific
groups in a target country. Thus, for
example, Cortright & Lopez (2000) empha-
size the desirability of crafting sanctions in
such a way as to deny assets and resources to
the ruling elite responsible for the target’s
objectionable policy. Baldwin (1985) argues
that even sanctions that do not elicit com-
pliance on the part of the target can be
viewed as significant exercises of power by
the sanctioner.2Martin (1992) and Mastan-
duno (1992) identify the determinants of
multilateral cooperation among sanctioners,
while Miyagwa (1992: 52, 61–62) analyzes
the impact of third-country assistance to the
target. Mansfield (1995) shows how the
degree of cooperation among sanctioners in
a multilateral alliance depends in part on
domestic politics within the sanctioning
countries. Fearon (1994) studies the role of
domestic political pressures in raising the
cost of compliance by a target government,
while Rowe (2001) demonstrates how
foreign sanctions can work through the
political process to produce policy change in
the target.
Along similar lines, public choice studies
reveal that decisions about whether or not to
impose sanctions and the sanctions instru-
ments selected are likely to be affected by
journal of PEACE RESEARCH volume 40 / number 5 / september 2003
520
1The outcome of each episode is ranked from one (failure)
to four (success); the contribution of sanctions to this result
is likewise ranked from one (none) to four (significant).
The overall success score of the sanctions episode is then
the product of the policy result score and the contribution
score.
2For example, Rogers (1996: 45) points out that simply
because sanctions are usually unsuccessful in ending wars
in progress does not mean that they are necessarily ineffec-
tive in achieving more modest goals.
02 JPR 40-5 Jing (JB/D) 23/7/03 8:39 am Page 520
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