What Sanctions Can, and Can’t Do

While President Obama expresses frustration at China’s refusal to support sanctions against North Korea for sinking the ROKS Cheonan, U.S. officials are also expressing their concerns that China will also undermine sanctions against Iran. For what it’s worth, I’m much less bullish about Iran sanctions than I am about sanctions against North Korea. The potential effect of sanctions is inversely proportional to a regime’s connections to the outside world and its possession of goods that have an export market. As an instrument for forcing behavior modification, they take years to work at best. When properly targeted, they can slow the rate at which a state proliferates, sponsors, or engages in other objectionable behavior.

Applied more broadly, they can gradually sap a state’s economic strength and domestic political support, though this may take years to manifest itself in undemocratic states. When I lived in the quasi-democratic oligarchy of South Africa in 1990, what I saw was a largely functioning economy with a great deal of ambivalence about international sanctions. Some liberal whites certainly agreed with the moral justice of their motivation, but most resented the sanctions and those who supported them.

We can expect the North Korean regime to stubbornly resist any changes to its behavior, too, and it doesn’t have an organized domestic opposition to fear yet. That said, its “palace economy” is still uniquely vulnerable to financial sanctions because of its self-imposed isolation and its broken domestic economy. If the objective of sanctions on North Korea is behavior modification, they will fail to achieve this objective. If the objective is to destroy the regime’s capacity to maintain control, they can, but only if applied with full force and considerable patience, and only if Chinese banks and companies know they’re not off limits, either.

Iran, by contrast, may not have an efficient economy, but it has a functioning economy, one with strong economic links to plenty of other states and corporations that would happily go on trading with Iran despite U.N. sanctions. Iran, unlike North Korea, has things that the global economy wants, chiefly oil. For Iran, the discouraging history of U.N. sanctions against Iraq may be the better analogy. But that being said, Iran also has a strong (if latent) domestic opposition. And if sanctions harm Iran’s economy enough, and if the opposition can link the lifting of sanctions to greater prosperity, sanctions may eventually cause more fence-sitters to actively oppose the government.

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