Seven Fallacies of Economic Sanctions
Despite the pain now being inflicted on Iran's economy by Trump's sanctions, the success or failure of such sanctions depends on whether they bring about regime change, or change a government’s behavior. Given the prevailing misconceptions about their rationale, it is not surprising that economic sanctions so often achieve neither goal.
LONDON – The sanctions imposed on Iran by US President Donald Trump have begun to bite the country’s economy hard. Inflation, seemingly defeated by President Hassan Rouhani, has returned with a vengeance, hitting 31% in 2018. According to the International Monetary Fund, the economy is poised to shrink by 6% this year, and inflation could reach 37%. Many industries are experiencing severe difficulties, and unemployment is mounting. Aiming to cut Iranian oil exports to zero, Trump is threatening to sanction countries – like China, India, and Japan – that continue to buy Iranian oil.
Given the pain that Trump’s unilateral sanctions are causing Iran, are they really the “silver bullet” policy that his administration hopes they will be?
Since World War I, governments have increasingly used economic sanctions to achieve their international political objectives. Despite a century of experience, however, the rationale for such measures remains far from compelling.