The Economic Peace Between Democracies: Economic Sanctions and Domestic Institutions
| Date | 01 November 2003 |
| Published date | 01 November 2003 |
| Author | David Lektzian,Mark Souva |
| DOI | 10.1177/00223433030406002 |
| Subject Matter | Journal Article |
641
Introduction
A large body of research in international
relations deals with the effect of domestic
institutions on interstate relations. One
almost ubiquitous finding is that there is a
certain and separate peace that exists
between pairs of states with democratic insti-
tutions that does not exist between pairs of
states where one or both states do not have
these institutions in place.1What is less clear,
however, is the effect democratic institutions
have on lower levels of coercive force, like the
use of economic sanctions, to achieve
political goals.
Our study is motivated by the question of
whether domestic institutions will have an
effect on the use of economic force that is
consistent with their influence on uses of
military force. For instance, are countries
with certain political systems more likely to
impose economic sanctions than countries
© 2003 Journal of Peace Research,
vol. 40, no. 6, 2003, pp. 641–660
Sage Publications (London, Thousand Oaks, CA
and New Delhi) www.sagepublications.com
[0022-3433(200311)40:6; 641–660; 038285]
The Economic Peace Between Democracies:
Economic Sanctions and Domestic Institutions*
DAVID LEKTZIAN
International Peace Research Institute, Oslo (PRIO)
MARK SOUVA
Department of Political Science, Florida State University
This article argues that the influence of democratic institutions in international relations extends
beyond the military realm and into the economic. The authors extend Bueno de Mesquita et al.’s insti-
tutional theory of political regimes to explain the use and variety of economic sanctions in world
politics. It is argued that democracies impose sanctions more often than other regime types because
they encompass a greater variety of interest groups. Yet, institutional incentives for successful foreign
policies lead democracies to prefer sanctioning non-democracies instead of democracies. The pacifying
influence of jointly democratic regimes, then, extends into the economic realm. Further, these same
institutional incentives account for variation across regime types in the choice of sanctions used and
the goals pursued. Owing to incentives to minimize harm to their public and achieve successful foreign
policies, democratic regimes are more likely than non-democracies to impose financial sanctions and
pursue minor foreign policy goals. The authors use the Hufbauer, Schott & Elliott sanctions dataset to
empirically evaluate each hypothesis. The empirical analysis supports the argument that domestic
political institutions affect the incentives of leaders and, therefore, the foreign policies of states.
* An earlier version of this article was presented at the
Midwest Political Science Association meeting on 25 April
2002. We thank Scott Gates, Bill Reed, David Clark,
David Baldwin, Kevin Sweeney, Brandon Prins, Chris
Butler, Chris Sprecher, and Brian Pollins for their many
helpful comments and suggestions. We alone are respons-
ible for all errors of omission or commission. The data used
in this article can be obtained from http://www.prio.
no/jpr/datasets.asp. Correspondence: davidl@prio.no or
msouva@fsu.edu.
1The literature on the democratic peace is now too exten-
sive to cite all relevant pieces. Recent reviews of this
research program include Russett & Starr (2000) and Ray
(1995, 1998).
68S 02lektzian (ds) 3/10/03 1:20 pm Page 641
with other types of political systems? Will
democracies avoid using economic sanctions
to coerce fellow democracies? Are some
political systems more or less susceptible to
economic coercion? The answers to these
questions are important to the study of inter-
national relations and, more specifically, to
the effects of domestic institutions on inter-
national conflict. Given the overwhelming
empirical evidence that two democracies will
not engage in (serious) military conflict, we
seek to understand if these findings hold up
at lower levels of conflict, such as the use of
economic sanctions.
Scholars studying military conflicts have
explored the effect of regime type on the
initiation, duration, severity, and outcomes
of wars. Until very recently, this has not been
the case for those studying the use of
economic force. Kim Richard Nossal (1999:
127), a leading sanctions researcher, notes
that scholars studying sanctions ‘have tended
to overlook one important variable: the
impact that regime type has on the success or
failure of international sanctions as an instru-
ment of global governance’. This article
builds on and extends the small, but
growing, body of work on the effects of
domestic institutions on the use of economic
force (Bolks & Al-Sowayel, 2000; Dehejia &
Wood, 1992; Dorussen & Mo, 2001; Hart,
2000; Kaempfer & Lowenberg, 1988a,b;
Kirchner, 1997; Lektzian & Souva, 2001;
Morgan & Schwebach, 1996; Nossal, 1999).
In addition to their role in the use of
military force, we argue that domestic insti-
tutions also influence the use of and responses
to economic coercion attempts. We extend
Bueno de Mesquita et al.’s (1999) insti-
tutional theory of the democratic peace to the
use of economic sanctions. On the basis of
this theory, we derive additional logical
expectations for behavior between states
regarding the use of economic coercion.
We argue, and find, that the institutional
structure of democracies leads them to use
sanctions as a foreign policy tool more often
than other types of political regimes.
However, while democracies use sanctions
more, an emphasis on successful foreign
policy and greater sensitivity to audience
costs make a democracy less likely to impose
sanctions on another democracy. The insti-
tutional differences between democracies
and autocracies also provide an incentive for
these regime types to use different types of
sanctions. Democracies, being more respon-
sive to broad domestic interests, prefer to
impose more targeted financial sanctions, as
they cause less harm to the sender’s general
public. We also find that the greater incen-
tive in a democracy to have more successful
public policies leads democracies to pursue
minor goals more often than autocracies. In
short, this research provides an analog for the
democratic peace proposition substituting
the use of economic force for the use of
military force.
Throughout the article, we use the terms
economic sanctions and economic coercion
interchangeably. For our purposes, both of
these terms are synonymous with the defi-
nition of economic statecraft provided in
Baldwin (1985). Baldwin defines economic
statecraft as influence attempts relying pri-
marily on resources that have a reasonable
semblance of a market price in terms of
money. For our theoretical purposes, and
based in part on the criteria in Baldwin
(1985: 32), economic statecraft (i.e.
economic coercion/sanctions) is simply the
use of economic means to influence the
behavior of another international actor in a
non-economic area.
The article proceeds as follows. In the
next section, we discuss the importance of
domestic institutions in the successful use
of economic sanctions. Then we outline
Bueno de Mesquita et al.’s (1999) insti-
tutional explanation of the democratic
peace. Next, we apply this theory to the use
of economic coercion and derive several
journal of PEACE RESEARCH volume 40 / number 6 / november 2003
642
68S 02lektzian (ds) 3/10/03 1:20 pm Page 642
To continue reading
Request your trial