Self-inflicted wounds. Chicken soup diplomacy. Boomerangs. Good intentions gone bad. These clipped responses reflect the accepted wisdom among policy cognoscenti about the scant value of economic sanctions to the United States. Even Hollywood is derisive; in the summer 1997 blockbuster Air Force One, "President" Harrison Ford denounces as "cowardly" a policy of applying mere economic sanctions to terrorist states.
Curiously, though, this near consensus has not slowed the congressional urge to apply sanctions. In the past three years the United States has imposed or threatened economic sanctions 60 times against 35 different countries, affecting 42 percent of the world's population. According to the Institute for International Economics, sanctions exact an annual cost of close to $20 billion in lost exports. To enforce sanctions against Cuba, Iran, and Libya, Congress has passed laws mandating secondary sanctions against foreign companies that do business with these countries. Proponents of such sanctions argue that such legal mandates are necessary for sanctions to work. Opponents point to damaged relations with key allies and utterly inconclusive results.
Sanctions are serious business, and they do involve serious costs. Their effect, however, is more complex than either moralistic optimists or realpolitik pessimists usually contend. A closer look at the history and strategic logic of sanctions shows that they can be a valuable policy tool in some domains but are useless in others. The trick is to figure out which is which.
The Poverty of the Pessimists
