McPherrin: The Dubious Effectiveness of Economic Sanctions

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Economic sanctions are still used as a primary foreign policy instrument of many world leaders, especially U.S. presidents – who can implement them via executive order with the simple stroke of a pen. Most often, they are typically wielded to pressure authoritarian states into acquiescing to various demands. Current examples include Venezuela, Iran, North Korea, Russia, Cuba, and others. Little has been gained from these sanctions, corresponding to a preponderance of evidence showing sanctions rarely work as intended, are ineffective in their goals, and are often substantially counterproductive.


Early History and Development


The utilization of economic sanctions as a policy instrument has been commonplace for nearly a century, though policymakers have been using economic statecraft to weaken rival states since antiquity. Sun Tzu, Thucydides, and Machiavelli are each early proponents of using economic pressure to weaken a rival military to the point that the aggressor state would more easily be able to achieve victory in direct martial conflict (Peksen and Drury, 2009). However, using economic means to achieve different goals and pressure sovereign states into capitulating to various policy demands did not arise until the early twentieth century, at the conclusion of World War I. In a sense, it is Woodrow Wilson who could be considered the father of the modern economic sanction. Capitalizing on the Allied victory over the German Empire, Wilson and his fellow members of the Big Four saw an opportunity to prevent such a global catastrophe from reoccurring, creating the Covenant of the League of Nations. In Wilson’s The Case for the League of Nations, he explains the ramifications for violating the international strictures proposed by the Covenant: “Suppose somebody does not abide by those engagements, then what happens? An absolute isolation, a boycott! The boycott is automatic. There is no ‘if’ or ‘but’ about that in the Covenant. It is provided in the Covenant that any nation that disregards these solemn promises with regard to arbitration and discussion shall be thereby deemed ‘ipso facto’ to have committed an act of war against the other members of the League” (Wilson, 1923, p. 69). Wilson goes on to describe the boycott, which would be a total blockade of any and all trade, messages, movement across borders, among other extreme measures. Thus, the modern economic sanction was born.

Unfortunately for Wilson, the United States Congress voted to reject membership in the League of Nations; this, along with other factors such as the USSR’s removal, would render the League largely ineffective. The League was therefore unable to contain the rise of the Third Reich in the 1930’s, failing to contain the type of aggressive action it had been created to prevent. John Foster Dulles, in his 1932 writings on the use of sanctions, theorized that the League was unable to truly provide any deterrent from aggression because Wilson’s boycott was much too ambitious. He effectively argued that no state would engage in such a boycott because it would be overwhelmingly economically and politically costly to the enforcing state (Dulles, 1932). Dulles then provides his solution to this problem, stating, “When devising penalties, whether they be applicable to nations or individuals, there are two essentials to bear in mind. The penalty must be sufficiently severe, but it also must be sufficiently sure of application, to operate as a deterrent. Penalties which are excessively severe, or which are excessively costly to those who are asked to apply them, generally are ignored. This fact quickly becomes apparent with the result that wrong-doers proceed with impunity” (Dulles, 1932, p. 18). Essentially, the League failed to deter aggression because aggressor states called its bluff – clearly illustrated when Benito Mussolini brazenly annexed Abyssinia on behalf of fascist Italy in 1935.

The following decades saw an increase in the utilization of sanctions as a policy instrument, often used for five primary objectives: compliance, subversion, deterrence, domestic symbolism, and international symbolism (Lindsay, 1983). Political scientists Arne Tostensen and Beate Bull, discussing the various ways in which sanctions can be implemented, explain, “Sanctions may be comprehensive, comprising the full gamut of means (trade boycotts and embargoes across the board), or selective, covering only certain areas. Furthermore, they may be mandatory by decision of the UN Security Council, or voluntary, leaving their implementation to the respective sanctioning states. Moreover, sanctions may be imposed unilaterally, by one state against another, or multilaterally, by a broad front of states against a target state” (Tostensen and Bull, 2002, p. 374). Political scientist Johan Galtung, in one of the earliest and most influential writings on the efficacy of sanctions, classifies seven different dimensions. Are they negative or positive in terms of punishment / reward? Are they aimed at individuals, or a collective whole? Are they implemented due to internal changes, or externalities? Are they unilateral, or multilateral? Are they general, or selective? Are they total, or partial? Finally, what type of sanction is used? (Galtung, 1967). Jonathan Kirshner contends that sanctions can not only be economic, but also strategic – such as in the case of oil sanctions or arms embargoes – as well as social. Social sanctions would be those that are based on influencing the target state’s civil society to reexamine their own norms and belief systems (Kirschner, 2010).


The 1990’s – Major Changes and Humanitarian Concerns


The fall of the Soviet Union in 1991 created a paradigm shift for the use of economic sanctions, as the bipolar system collapsed and the West could dictate world affairs at will. The United Nations Security Council (UNSC) had been hamstrung in its ability to exercise the broad intervention powers granted under Chapter VII of the UN Charter due to the veto powers of the diametrically opposed United States and Soviet Union.  As a result, there were only two instances of institution-led multilateral sanctions activity prior to 1991: Rhodesia and South Africa – which was widely regarded as a highly successful case study of the positive impact sanctions can have (Cortright and Lopez, 2000) (Crawford, 1999). Now free to operate with impunity, the UNSC would vote to impose sanctions twelve times during this decade (Drezner, 2011).

The most impactful sanctions case began when Iraq’s Saddam Hussein invaded Kuwait on August 2, 1990. His military occupied Kuwait and asserted total control, and Hussein refused to withdraw despite international condemnation. On August 6, the UN Security Council implemented what was by far the most comprehensive sanctions regime ever imposed, prohibiting all oil sales and banning Iraqi importation of all goods with the exception of medicine and food on a conditional basis (UNSC Resolution 661, 1990). For Iraq, a nation that needed oil sales to sustain its economy and relied almost entirely on imports for consumer goods, this was devastating (Gordon, 2009). Moreover, the United States and the UNSC initiated a comprehensive bombing campaign targeting not only Iraqi military installations but also the entire national infrastructure network. This included oil refineries, the electrical grid, water and sewage treatment plants, telecommunications facilities, bridges, and roads. Iraq’s infrastructure was crippled in many areas, and completely destroyed in others (Gordon, 2009). Iraq finally withdrew from Kuwait, but the calamity had only begun. Marti Ahtisaari, an envoy sent by the United Nations to Iraq for inspection purposes shortly after hostilities had ceased, described that Iraq had been reduced from a highly urbanized and mechanized nation into a pre-industrial society. He called the humanitarian nightmare that was unfolding “near-apocalyptic,” as sanctions were causing food shortages, lack of shelter, lack of health and medical support, and the total destruction of the power grid, leading to the breakdown of health and sanitation systems, life support systems, and the communications network. (UNSC Letter 22366, 1991).

The question, of course, is why sanctions were not then lifted, when the original explicit policy goal of forcing Hussein to withdraw from Kuwait had clearly been achieved. Sanctions were not lifted until over ten years later, in 2003. The goal had shifted to forcing Hussein from power (Gordon, 2020). Though pressure to lift sanctions continued to build throughout the 1990’s among the international community, the United States and the United Kingdom had veto power over the already imposed sanctions regime. The goal was to create as much devastation amongst the civilian population as possible, essentially by placing the country under a modern day siege, via a completely disproportional and indiscriminate method of economic warfare. The disaster was not accidental, it was intentional, and the sanctions were enforced as strictly as possible. The US and the UK blocked the methods of humanitarian assistance at every juncture, when the legal documentation clearly provided for exceptions on humanitarian grounds (Gordon, 2020).

This pressure on the civilian population would theoretically exert enough pressure on the target government to force governmental destabilization and regime change. This method of influencing regime change is termed “the transmission mechanism” (Tostensen and Bull, 2002). In the case of Iraq, the attempts to force the transmission mechanism utterly failed. By many estimates, somewhere between 500,000 and 1,500,000 Iraqi civilians perished due to sanctions, many of whom were children (Gordon, 2009). The Bossuyt Report – having been requisitioned by the UN High Commission on Human Rights to review the Iraqi situation – claimed that not only were the Geneva Conventions violated, but that an accusation of genocide could be leveled against the sanctioning countries (Bossuyt, 2000, Article 73). This same report, discussing the attitude of the United States Government concerning the situation, states, “The sanctioning bodies cannot be absolved from having the “intent to destroy” the Iraqi people. U.S. Ambassador to the United Nations Madeline Albright – who would soon be named Clinton’s Secretary of State – admitted this on national television. When questioned whether the half million deaths were worth it, she replied, “We think the price is worth it” (Bossuyt, 2000, Article 72). Three senior UN officials who had been intimately involved with the Iraqi sanctions regime resigned from their posts in the resulting fiasco. Denis Halliday, one of the humanitarian coordinators on the ground in Iraq attempting to alleviate the ongoing crisis, would echo the Bossuyt Report, contending the Iraqi sanctions were “genocidal” (Gordon, 2009).


“Smart” Sanctions: One Step Forward, One Step Back


Because comprehensive sanctions had proven ineffective in removing Hussein from power and had caused a humanitarian disaster, the need for a new, more targeted kind of sanction was born (Drezner, 2011). The new idea behind sanctions was to target key elites within target states, thereby circumventing the problem of harming civilian targets, while still putting pressure on the government to acquiesce to whatever policy demand was being proposed. The most common of these new sanctions includes financial sanctions, asset freezes, travel bans, restrictions on luxury goods, and arms embargoes (Drezner, 2011). George Lopez, one of the early proponents of smart sanctions, discusses that targeted sanctions are typically imposed for four main objectives: ending serious violent conflict, preventing international terrorism, controlling nuclear proliferation, and protecting human rights and civilians during serious violent conflict (Lopez, 2012). After the September 11, 2001 terrorist attacks in the United States, smart sanctions were widely seen as a potential solution to hinder further terrorist activity, especially through asset freezes. By 2010, both the UN and the US strongly endorsed the utilization of smart sanctions (Drezner, 2011). While smart sanctions were seen by some as an improvement, there were still those who cautioned their use. Joy Gordon claimed that smart sanctions had difficulties related to implementation, humanitarian impact, and due process rights – this last issue being most notoriously apparent during the Kadi Case (Gordon, 2011). She contends, “While targeted sanctions have not brought about the kind of catastrophe that characterized the Iraq sanctions in the early 1990’s, they are still fraught with many of the same difficulties and failures that characterized their not-so-smart predecessors” (Gordon, 2011, p. 332).


General Effectiveness


Much has been written of the general efficacy of economic sanctions, the debate around which continues to this day. One of the more notorious clashes was between Hufbauer, Schott, and Elliott (HSE) and Robert Pape in the 1990’s. HSE, in the second edition of their 1985 work Economic Sanctions Reconsidered, thoroughly examine 115 cases of the unilateral use of sanctions. Up to this point, the prevailing theory surrounding sanctions was that they were ineffective policy instruments. HSE qualitatively found that 40 of the 115 cases were moderately successful or better. They also analyzed the various types of sanctions, and put them in five categories, measuring the success of each category. There were 51 cases of ‘modest changes in policy’, of which they found 17 to be successful; 21 cases of ‘governmental destabilization’, of which 11 were seen to be successful; 18 cases of ‘military adventure disruption’, of which 6 were successful; 10 episodes of ‘military impairment’, of which two were successful; and 20 cases of ‘other major policy changes’, of which five were successful (HSE, 1990).

Robert Pape, in his 1997 article “Why Economic Sanctions Do Not Work”, rejected HSE’s findings on a number of grounds. His contention was that both the empirical data as well as the deductive logic on which it is based were fundamentally flawed, finding that out of the 40 ‘successes’, only five can truly be considered such. Of the 35 errors that Pape found, “The remainder are accounted for by 4 classes of errors: 18 were determined by force, not economic sanctions; 8 are failures in which the target states never conceded to the coercer’s demands; 6 are trade disputes, not instances of economic sanctions; and 3 are indeterminate” (Pape, 1997, p. 99). Pape goes into detail on the cases concerning ‘successful’ governmental destabilization, asserting that in each of the five cases considered successful, the government was overthrown in a military coup primarily sponsored by a foreign government (Pape, 1997). Kimberly Elliott, one of the HSE authors, responded to Pape, arguing that he mischaracterized HSE’s position and used a different research design. She proceeded to argue the specifics of certain cases with Pape (Elliott, 1998). Pape responded yet again, doubling down on his original assertions, and furthering the idea that there is a divide in the logic amongst academics of whether sanctions are effective (Pape, 1998).

As for smart sanctions, Lopez analyzes twelve cases in which they have been used, finding that at least eight of the twelve can be considered at least moderately successful, mostly in the arenas of global security and human rights. Of the other four, he still believes that the two cases of preventing nuclear weapons proliferation were moderately successful, and that the final two were very difficult situations that were nearly impossible to solve (Lopez, 2012). Yet Lopez and his colleague David Cortright would even admit that comprehensive sanctions are still significantly more effective in coercing target governments to make concessions, because political effects are greatest when the economic impact of the sanctions are greatest (Cortright and Lopez, 2002). Daniel Drezner, while admitting that smart sanctions do circumvent the political problems for sender countries by minimizing collateral damage, argues, “Nevertheless, the evidence to date suggests that smart sanctions are no better at generating concessions from the target state. In many ways, they are worse” (Drezner, 2011, p. 104).


Economic Sanctions and Levels of Democracy


There has been substantial research recently published – much of it by Dursun Peksen and Cooper Drury – providing evidence that sanctions have an adverse effect on democracy in target states, by creating incentives for state repression and consolidating an autocratic regime’s power (Peksen and Drury, 2009). Instead of the transmission mechanism working as previously discussed, the following scenario will unfold. The targeted regime will be incentivized to look strong in the face of foreign aggression, and refuse to capitulate, as doing so would make them look weak and lose support from allies. Simultaneously, sanctions will send a message that the sanctioning country implicitly supports any opposition to the regime that may be active within the target state, putting a target on the back of the opposition. The regime will engage in repression to weaken its opposition – often supportive of democratic ideals – while sending a signal of strength to its supporters. Due to the economic burdens put on civilians, they may rise up in protest of the government, but they will be violently repressed, leading to further human rights violations and reductions in civil liberties. Worse still, leaders will be able to effectively shift the costs of the economic burdens to civilians, keeping available resources to themselves. This will give the regime further leverage over groups such as the military, who need resources such as fuel and food to function effectively. The regime will use this economic leverage to exert further control over the population through a willing military and various key social groups (Peksen and Drury, 2009). The regime may also be able to intentionally shift resources away from rival opposition groups in the same way they are able to consolidate resources around themselves, thereby further weakening any potential challenges to their power (Peksen and Drury, 2010).

A number of authors have published material in support of the conclusions of Peksen and Drury. Susan Allen has largely found that domestic political response varies by regime type, and that the transmission mechanism only seems to work in democratic systems; within autocracies, the transmission mechanism fails because of the inability of the population to vote their leaders out of office (Allen, 2008). Allen remarks, “When regimes are threatened from the outside, they often do whatever is possible to limit concurrent internal threats. To do so, states play to their strengths, and states that choose repression typically have strong tools of force at their disposal” (Allen, 2008, p. 924). Allen observes that the more autocratic a state is, the greater the cost burden on the population, from an economic perspective but also from the perspective of political violence. Therefore, the population is unlikely to respond to sanctions in the ways that the sanctioning countries intend, out of fear of retribution. One of Allen’s most salient conclusions is that due to sanctions being unable to create domestic political costs for autocratic leaders, sanctioning countries or organizations need to find a way to create international costs. She suggests that asset freezes, travel bans, and general isolation from the diplomatic community could have an impact – all of which correspond to the concept of smart sanctions previously discussed (Allen, 2008).

The concept that the international community could be effective in putting pressure on autocratic states has been recently explored by Jiyoun Park and Hyun Jin Choi, as well as by Reed Wood. Park and Choi examine elite politics and focus exclusively on smart sanctions episodes (Park and Choi, 2020). They find that despite the “smartness” of the sanctions, many still cause collateral damage to the general population in target states in the form of significant human rights violations, especially when not implemented correctly. Smart sanctions with a broader scope will cause autocratic leaders to feel as if their political survival is threatened, feeling especially threatened by rival elites. In turn, they oppress their people to prevent this situation from occurring (Park and Choi, 2020). Park and Choi explain, “When non-democratic leaders lose power, supporters are more likely to replace the leader through a coup, a revolt, or an assassination. Therefore, the leaders have stronger incentives to hold onto power by punishing prospective challengers and their potential supporters” (Park and Choi, 2020, p. 14). The authors do concede that if implemented correctly and precisely, smart sanctions can actually improve conditions in the target state, by limiting a leader’s ability to recruit “machines of oppression”(Park and Choi, 2020, p. 14). However, they find that the correct implementation of smart sanctions is a rare occurrence. Reed Wood also finds that multilateral sanctions – specifically when imposed by the UN – can lead to increased state repression (Wood, 2008). He claims the negative economic growth and legitimization of the opposition will increase repression, which is in line with previous authors’ ideas. Wood concludes, “Sanctions that generate fewer domestic threats are less likely to promote regime repression” (Wood, 2008, p. 509).

Antonis Adam and Sofia Tsarsitalidou discuss the specific ways in which sanctions can lead to a decline in civil liberties via repression, specifically as they relate to unilateral United States sanctions (Adam and Tsarsitalidou, 2018). They maintain that “Sanctions imposed on non-democratic regimes do not improve citizens’ well-being. On average, they appear to worsen things…sanctions tend to strengthen a dictator’s position by lowering the prices of repression and loyalty, thereby creating a ‘rally around the flag’ effect” (Adam and Tsarsitalidou, 2018, p. 208). The authors present an interesting theory in their conclusion: it is possible that dictators intentionally provoke sanctions, knowing that the sanctions regime will give them more power (Adam and Tsarsitalidou, 2018). Nikolay Marinov, through studying the effects of economic pressure on government destabilization, finds that economic sanctions are fairly effective against democratic states, due to citizens’ abilities to remove a leader from power. However, they are often ineffective against autocrats due to the aforementioned “rally around the flag” effect. Additionally, Marinov finds that sanctions regimes implemented against autocratic governments are typically successful due to the accompaniment of military intervention (Marinov, 2005).

Peksen and Drury further examine the erosion of specific democratic institutions within target states due to sanctions, specifically related to human rights, media openness, and women’s rights. Peksen discusses the oppressive capacity of regimes when pressured by sanctions, laying out four major factors for which to account. First, economic sanctions allow political elites to escape the cost of the economic pressure, improving ties between political leadership and their constituencies, as well as prominent social groups. Second, these economic sanctions will create greater poverty, higher unemployment, and poor health conditions for ordinary citizens. This economic crisis will increase the repression of various anti-government movements that rise up. Third, sanctions will increase a target autocracy’s legitimacy, which will facilitate their oppression of anti-government movements, in a nationalistic surge. Fourth, sanctions will isolate target countries from international trade and investment, decreasing overall economic wealth and erasing the financial means of much of the middle and upper classes of society (Peksen, 2009). Peksen also discusses the effect on media, theorizing: “Sanctions are likely to worsen the level of press freedom in the sanctioned countries by (1) increasing governmental restrictions and repression against the media following the growing economic and political isolation of the target regimes and (2) reducing the economic viability and development of independent media outlets” (Peksen, 2010, p. 451). Media will be forced to depend on state subsidies and more concentrated media ownership, there will be less freedom of the press, and political leadership will be able to more capably restrict the flow of information due to the international isolation (Peksen, 2010). Women’s rights are also detrimentally affected by economic coercion. Many autocratic societies are patriarchal in nature, making it difficult for women to gain access to economic and social status. Economic and political upheaval only disadvantages women, as well as minorities. (Peksen and Drury, 2014). Overall, the overwhelming consensus is that sanctions will decrease democracy and civil rights within targeted states, especially autocracies.




There are clear patterns that emerge when looking at the use of economic sanctions for the past century. First, sanctions in the form of comprehensive trade embargos have drastically deleterious human rights impacts on the most innocent members of target states. This became clear in the case of Iraq. Yet, countries such as the United States continue to use them, likely due to the perception that the transmission mechanism is more effective when causing more widespread economic devastation. Second, smart sanctions began to be used as a means of curbing the humanitarian problems associated with trade embargoes; while these smart sanctions seem to be theoretically sound, they are exceedingly difficult to correctly implement. And if not implemented correctly, they are largely ineffective due to increasingly adept evasion by the targeted elites. Third, economic sanctions, especially when targeting autocratic regimes, can cause negative utility by increasing the regime’s legitimacy and repression capabilities. Moreover, they can poison that state against future diplomatic efforts. Overall, sanctions are rarely effective in their goals, and should be used with extreme discretion.



Photo by Trump White House Archived, Public Domain Mark 1.0.




Works Cited


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Research Editor, Research Fellow at The Heartland Institute

Jack McPherrin is the managing editor of 1818 Magazine. Jack works as the research editor for the Editorial Department of The Heartland Institute, where he also contributes to the mission of the Socialism Research Center as a research fellow. He is in the final stages of completing his Master’s Degree in International Affairs from Loyola University-Chicago, where his myriad research interests primarily encompass domestic and international economic policy, global institutions, authoritarian regimes, and foreign affairs - with a particular emphasis upon Russia and China. Prior to his graduate pursuits, Jack spent six years in the private sector after graduating from Boston College with a dual Bachelor's Degree in Economics and History. He currently resides in the Lincoln Park neighborhood of Chicago, a few short miles from where he was raised.

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