VoxEU Column Politics and economics

Sanctions and nuclear proliferation

The Obama administration is simultaneously imposing economic sanctions on Iran and North Korea and suggesting that it would like to take a more conciliatory approach. This column says that economic sanctions rarely work in altering the behaviour of a target country, especially as a stand-alone tool of foreign policy. That suggests that the new US president is right to use both carrots and sticks.

For decades, the US has used economic sanctions in an attempt to pressure nations to refrain from developing weapons of mass destruction. However, targets of US sanctions, such as North Korea and Iran, have not significantly altered their policies when confronted by sanctions. A study by economists at the Peterson Institute for International Economics found that since 1970, unilateral US sanctions have achieved foreign policy goals only 13% of the time (Hufbauer et al., 2007). The history of economic sanctions has shown that, in many cases, only military action can play a decisive role in forcing a country to modify its policies. However, this is not to say that sanctions cannot play a supporting role in convincing a country to change its behaviour.

Researchers have found that sanctions tend to be more successful in altering the behavior of a target country when their objective is not too ambitious and therefore does not require substantial coordination among countries imposing sanctions, which can be difficult to attain. Also, the target country should be highly dependent on trade with the imposing country prior to the sanctions. Moreover, sanctions that are levied forcefully and speedily have the best chance of maximising the economic hardship imposed on the target country and thus achieving their goal. Finally, sanctions should not entail large burdens on firms and workers in imposing countries, which can result in the loss of public support for sanctions (Hufbauer, 1998).

Indeed, sanctions have had some success. Pressured by sanctions, Libya’s Colonel Muammar al-Gadhafi agreed to turn over two suspects in the 1988 bombing of Pan Am flight 103, which killed 270 people. The UN in return terminated sanctions against Libya which included prohibitions on the sales of weapons and oil-industry equipment and also prohibitions on international travel to Libya. Also, sanctions helped convince the apartheid government of South Africa to allow democratic elections and may have helped force Serbia to the negotiating table in its war with Bosnia in 1995. However, sanctions have not always met their objective as seen in the case of the Saddam Hussein who refused to remove his Iraqi army from Kuwait in 1990 in spite of sanctions; it took U.S. military force for Saddam’s army to be shoved out of Kuwait.

On February 2, 2009, the Obama administration stated that it had imposed sanctions on companies in Iran, North Korea, and China for violating US law intended to prevent the spread of missiles and other weapons technology. Although the penalties were largely symbolic in nature, they signalled a willingness of President Obama to continue the Bush administration’s tough stance on weapons proliferation. At the same time, the Obama administration has portrayed a conciliatory stance with Iran by indicating that it is willing to enter into talks with Iran regarding its nuclear programme. Obama also suggested that there could be some form of direct communication between the US and North Korea regarding nuclear proliferation. Do sanctions have a supporting role in helping to bring about nuclear disarmament (Carbaugh, 2008)?

Sanctions, Iran and North Korea

In the cases of Iran and North Korea, the US has modest remaining economic leverage to use against these countries because its past sanctions which have already terminated almost all commercial ties. Also, Iran’s strong global trade ties and its substantial importance in energy production make it difficult to isolate and pressure. Over the past two decades, US trade with Iran has greatly declined, but Iran’s trade with the rest of the world has increased, thus reducing Iran’s reliance on trade with the US. Also, when the price of oil was over $100 a barrel, Iran’s oil revenues were strong and the country was confident that it could outlast any sanctions threat. With oil prices plunging in recent months, however, Iran’s ability to withstand sanctions has been weakened.

As for military action, many European countries have expressed reservations about using force against Iran. Thus, sanctions will not likely prevent a determined country, such as Iran, from eventually developing a nuclear weapon. Despite US sanctions, India, Pakistan, and North Korea were able to develop nuclear weapons in violation of the Nuclear Non-Proliferation Treaty. However, history shows that targeted sanctions delaying investment in Iran’s oil sector and decreases Iran’s access to the US financial system could help postpone Iran becoming a nuclear power.

During the past two decades, US sanctions have been an important part of US policy to discourage Iran and North Korea from acquiring new weapons and supporting for terrorism. However, the overall impact of sanctions and the extent to which they promote US objectives is questionable. The view of critics, that sanctions against Iran have largely been ineffective, has been reached by comparing the results of sanctions against its publicly revealed primary objective, to prevent Iran from pursuing nuclear capabilities and to fund terrorism. That is, sanctions are seldom effective in inducing major changes in the policies of an important power.

Yet there are other, less ambitious objectives of sanctions, such as demonstrating national resolve or promoting the prestige of the sanctioning government that may be more realistic than the primary objective of sanctions. Policymakers often overstate the publicly revealed primary objective to win acceptance of sanctions by their domestic public or to establish a strong bargaining position to achieve a better eventual settlement with the target. When evaluated against the achievement of less ambitious objectives, sanctions may be more successful. This may well occur in the conflict between the US and its allies against Iran and North Korea.


Simply put, sanctions seldom work as a stand-alone tool of foreign policy. In the absence of military conflict to alter change in the policies of target countries, policymakers must be prepared to negotiate and to offer positive incentives (“carrots”) as a method of encouraging cooperation from targets, rather than relying on sanctions to bring about change. This appears to be the objective of the Obama administration in its dealings with North Korea and Iran.


Carbaugh, Robert J. 2008 “Are Economic Sanctions Useful in Discouraging the Proliferation of Weapons of Mass Destruction?World Economics, December, Vol. 9, No. 4.
Hufbauer, Gary C., et. al. 1998. Case Studies in Sanctions and Terrorism: Executive Summary. January.
Hufbauer, Gary, Jeffrey Schott, Kimberly Elliott, and Barbara Oegg 2007. Economic Sanctions Reconsidered, Third Edition, Washington DC: Institute for International Economics.

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