How sanctions work and how they do not.
According to Daniel W. Drezner, professor of international politics at Tufts University, there are 4 characteristics of effective sanctions.
Specific demand – To ask the target country to do a particular job.
To stop/start doing something like to stop proliferating their nuclear program. For the longest time, the sanctions imposed against Iran were not clear whether they were for its nuclear program or trying to foment regime change. However this time under Trump’s regime the sanction was not apparent.
Sanctions are effective if the imposing country has some relations with the other country.
Aim for money-based sanctions rather than product-based sanctions.
Through a ban of products, there will be black marketing and local traders will be happy with such a situation. However, a financial-based sanction will have severe restrictions on the country. US sanctions against Iran were both trade and financial sanctions.
Make other countries support your sanction.
If you have other countries involved then it will be better as it will create more pressure on the country being imposed. Because otherwise the country being imposed sanctions will be able to better out the situation by dealing and trading with other countries. Or may other countries may ban the imposing country.
In case of US sanctions on Iran, Europe did not support the sanction. However, the sanction is still effective as the Dollar and US banking are quite effective in today’s world for international business. However, nowadays some emerging countries and developed countries have workarounds to go around the US dollar and banking system and conduct international business.
In the case of US sanctions on Iran India still conducted various deals with Iran.
For the US, since its currency is used across the world they need to understand that the more sanctions they levy there more leverage they lose in the international market.
But there is a downside of imposing sanction which is it leads to more inequality as sanctions hit people with the least power and who are economically vulnerable. The objective of any sanction is to change the behavior of a government but in reality, it impacts the people who don’t have an influence on the sanction of the government.
For example in North Korea sanctions led to a situation where people were marginalized and Kim Jong Un and his associates in high power were not at all impacted.
In Iran, people were already demanding basic necessities like food and water. And sanctions devalued their local currency making these items expensive and making the situation more horrendous. The leader was not impacted at all.
Though it may sound like the sanctions may force the public to ask its government to change its attitude towards certain issues however it may produce the opposite effect. The public may show solidarity with its government and may support its decisions and creating the imposer country an enemy in the eyes of the public.
In certain cases, sanctions may also create a situation where the government sensing danger to its existence through revolts may start imposing severe restriction on the public and creating much worse situations for them leading to sub human conditions.
In the end, according to Daniel, the best sanction is the sanction not imposed. A threat of imposing sanctions keeps things out of public view between the government and may create some leeway for the target company to reach a mid-way with the imposing country’s demand.