European Union Sanctions and Foreign Policy

When and Why do they Work?

Clara Portela

• Publisher: Taylor & Francis
• Year: 2012
• eBook ISBN: 9781136941818
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Arms Control
• Index: Politics & International Relations

Winner of the THESEUS promising award for Research on European Integration 2011.

Sanctions are an important tool within the foreign policy of the European Union, which have until now remained obscure to both scholars and the general public. This book examines sanctions as a political tool of influence and evaluates the efficacy of sanctions imposed by the EU against third countries and their ability to bring about the desired outcome.

While the principal sanctions activity of the EU takes place under the Common Foreign and Security Policy, the author also considers the suspension of development aid under the ACP-EU Partnership Agreement, the withdrawal of trade privileges under the Generalized System of Preferences and other sanctions outside these frameworks. Reviewing the sanctions practice of the EU in its virtual entirety, Portela assesses the relevance of classical sanctions theory by testing a series of hypotheses with empirical case-studies attempting to identify the determinants of success of EU sanctions.

Enhancing our understanding of the EU's international role, this book will be of interest to students and scholars of international politics, security studies, EU studies, human rights and democracy, conflict management, IPE and development studies.

1 Sanctions and their efficacy

Notwithstanding the fact that the debate on the efficacy of sanctions has been in existence for four decades, the investigation of their efficacy has not yet yielded satisfactory results. The determinants for the success and failure of sanctions have not yet been ascertained. The inherent difficulty of the task has been further compounded by a transformation of the instrument itself. Classical comprehensive trade embargoes have given way to more sophisticated measures, so-called ‘targeted’ sanctions. After addressing some essential definitional questions, this chapter outlines the progress made in International Relations (IR) scholarship in identifying the determinants of the success and failure of sanctions. It then proceeds to describe the emergence of the new concept of targeted sanctions, and to discuss its implications for the sanctions debate, paying special attention to the case of sanctions imposed by the EU.¹ The final section of the chapter discusses a number of methodological issues related to the analysis and measurement of success, and identifies flaws, with a view to obviating them in the design of the present study. What are targeted sanctions? How do they differ from classical embargoes? How have they affected IR scholarship on sanctions evaluation, and how well has the methodology of evaluation been adapted to study their impact?

International sanctions as an object of study

The methodological debate on sanctions held in the late 1990s between Hufbauer et al.-Pape-Baldwin generated a fruitful discussion on the definition of the object of study. Although the debate was confined to economic sanctions, it offers useful insights for a definition of sanctions as tools of influence. In the classical definition, sanctions entail ‘the deliberate government-inspired withdrawal of... trade or financial relations [to obtain] foreign policy goals’ (Hufbauer et al. 1985:2). According to this formulation, two central definitional elements can be discerned in the concept of economic sanctions: the coercive measure needs to be economic in nature and its aim needs to be political. This effectively excludes measures to attain economic policy goals. In his critique of Economic Sanctions Reconsidered, Pape specified this distinction in order to illustrate the difference between economic sanctions and trade wars. According to this author, economic sanctions‘seek to lower the economic welfare of a target state by reducing international trade in order to coerce the target government to change its political behaviour’ (Pape 1997:93-94). By contrast, a trade war takes place ‘when a state threatens to inflict economic harm... in order to persuade the target state to agree to terms of trade more favourable to the coercing state’ (1997:94). In Pape’s view, trade wars and economic sanctions should be studied separately, primarily because the basis of decision making by the target is different:

States involved in trade disputes decide whether to make concessions depending on which choice they expect would maximise their wealth. Targets of economic sanctions, on the other hand, understand that they would be better off economically if they conceded to the coercer’s demands, and make their decisions based on whether they consider their political objectives to be worth the economic costs.

(Pape 1997:96)

With this observation, Pape exposes the core difference between the target state’s compliance and non-compliance in both situations: decisions follow economics-based, as opposed to purely political, calculations. Therefore, ‘there is good reason to believe that the variables that dominate target states’ decision making in response to different types of demands are often different’ (Baldwin and Pape 1998). In view of this fundamental difference, Pape’s claim that theories of the determinants of success in trade disputes are of limited applicability to decision making on compliance with economic sanctions seems to be warranted. Indeed, consensus has emerged among researchers that economic sanctions and trade disputes are analytically distinct and that their study should not be conflated.

However, an additional, often overlooked reason underlies the differences in the bases of decision making between trade and non-commercial disputes. International trade disputes are subject to international legal regulation, mostly through the legal system put in place by the World Trade Organisation (WTO). The WTO has its own system of sanctions applicable as countermeasures in response to breaches (Charnovitz 2005). Thus, there is a higher degree of predictability for decisions on sanctions imposed as a result of breaches of WTO rules. The same applies for EU measures of commercial defence, such as anti-dumping measures or remedies: EC legislation specifies the sorts of infractions which might trigger the adoption of countermeasures. In contrast, in foreign policies falling outside the narrowly defined trade realm, the EU has greater discretion in deciding on sanctions against third countries. While some international norms such as human rights have achieved a high degree of codification under international law, countermeasures in response to the violations of these norms are not foreseen in the relevant treaties. The UN Security Council is endowed with the capacity to impose mandatory multilateral sanctions once it has determined a ‘threat to international peace and security’.² No enforceable norm stipulates that the outbreak of violent conflict, nuclear proliferation or the imprisonment of political opponents should trigger sanctions by third countries, especially when the UN Security Council refrains from taking action. EU measures featured in this book are thus agreed on a purely voluntary basis by the Council of Ministers. In view of this fundamental difference, the study of sanctions in commercial and non-commercial disputes should be kept separate in order to accurately ascertain their coercive power in each realm.

Theory on the operation of sanctions

In order to analyse the success and failure of sanctions, the following section outlines the theory according to which sanctions are expected to attain their objectives.

The point of departure: the ‘naive’ theory and its critics

The classical formulation of how sanctions are expected to operate stems not from any official statement by the leadership of a state which has levied sanctions - a ‘sender’ state in sanctions terminology - but from a critical academic. Galtung formulated a general theory on the operation of sanctions, which he coined the ‘naive’ theory of sanctions. It postulates that the economic disruption caused by sanctions is expected to translate into political pressure that will eventually compel the leadership in the target country to change its policies, or will lead to its overthrow (Galtung 1967). According to Galtung’s classical formulation of the ‘naive’ theory of sanctions, these tools operate in a similar way to military warfare. Both share the same end, the ‘political disintegration of the enemy so that he gives up the pursuit of his goals. The method used is value-deprivation’ (Galtung 1967:386). The theory foresees a roughly proportionate relation between both phenomena; the more intense the value-deprivation, the more widespread the political disintegration:

The idea is that there is a limit to how much value deprivation the system can stand, and that once this limit is reached (resulting in a split in leadership or between leadership and people), then political disintegration will proceed very rapidly and will lead to surrender or willingness to negotiate.

(Galtung 1967:388)

A clear parallel thus exists with the use of force. In his essay Arms and Influence (Schelling 1966), Schelling inquires about the causes of success or failure of this tool. According to Schelling, the purpose of inflicting suffering is to influence somebody’s behaviour: it is the threat of damage that can make somebody yield. One of the points of confluence between the logic underlying the use of force and sanctions concerns the conditions that Schelling lists for the efficacy of the use of force as a political instrument: to be coercive, violence has to be anticipated, and be avoidable by accommodation, for it is not the threat alone that is effective, but the corresponding assurance that the target can avoid pain. Both force and sanctions operate by inflicting pain and by imposing the prospect of continued suffering unless the target complies.

Under Galtung’s description of the expected functioning of sanctions, two different modes of operation can be discerned which are meant to produce different outcomes through different mechanisms. One follows the objective of overthrowing the existing leadership by popular upheaval. It presupposes that a ‘societal transmission belt’ exists that will produce political pressure that will eventually lead to the overthrow of the leaders, allowing the opposition to take power. The overthrow of the Trujillo’s regime in the Dominican Republic as a result of US economic sanctions can serve as an example of this form of operation.

The second mode of operation consists in inducing the leadership of the target country to modify its policies according to the preferences of the sender. This shift comes about because ‘decision-makers change their calculation of costs and benefits’ (Cortright and Lopez 2000:22). For this to happen, the existence of the ‘societal transmission belt’ that transforms economic damage into political pressure is not a necessary precondition. The change of heart in the leadership concerned can be prompted by societal or opposition pressure, but may also respond to other considerations, such as personal damage, or loss of international prestige. Thus, this mode of operation can accommodate targeted sanctions, since they are expected to operate without damaging the economy as a whole.

While the desired policy change can be effected either through the overthrow of the targeted leaders or through their coercion, some authors tend to conflate the two modes of operation without making explicit this duality. Since EU sanctions do not contemplate the goal of destabilising the target government, but aim only at changing the target leader’s policies, the former remains excluded from the present study.

Explaining inefficacy

If, according to the naive theory, the economic pain inflicted by sanctions is expected to motivate the target to comply with the sender’s demand, why does this not always occur in practice? Scholarship has long established that there is no automatic link between the effectiveness of economic sanctions in inflicting economic pain and in compelling policy changes in the target (Cortright and Lopez 2000:3, van Bergeijk 1999:98). Sanctions regimes with a remarkable economic impact have failed to induce changes in the conduct of target governments. Conversely, the mere threat of sanctions has sometimes succeeded in bringing about the desired policy change (van Bergeijk 1994:23, Buchet de Neuilly 2003:102, Barber 1979:389). Nevertheless, it remains that economic and political effectiveness are not totally unrelated; the quest for accurate determinants for successful sanctions has thus persisted over the decades.

Early explanations of the inefficacy of sanctions contested the assumptions regarding the operation of the ‘societal transmission belt’. Galtung notes that the naive theory disregards the target society’s capacity to adapt to new circumstances, from both the psychological and the economic point of view: ‘one gets used to life under hardship’ (Galtung 1967). As for political impact, he observes that value-deprivation may lead to political integration rather than disintegration, producing what he terms the ‘rally around the flag’ effect (Galtung 1967:388-89; 391). Both aspects have been widely documented in subsequent scholarship: an economy under siege can find ways of successfully adapting to shortages, as do external providers. For their part, leaders can capitalise on externally imposed sanctions to secure their grip on power (Kirshner 1997).

Intent on identifying the determinants of success of sanctions, authors have presented increasingly sophisticated approaches since the mid-1990s (Kirshner 1997, Morgan and Schwebach 1997, Drezner 1999, Blanchard and Ripsman 2002). A number of authors follow the naive theory while expanding the number of determinants for success (Kaempfer and Lowenberg 1999, Cortright and Lopez 2000). Indeed, improvements to the theory have been virtually limited to the consecutive addition of new variables. Scholars have also attempted to sharpen the naive theory by taking a closer look at the internal make-up of the target society. This subfield sets out to explain why economic sanctions do not manage to harm the societal fabric of the target society in a way that leads to the unseating of the leadership, as posited by the naive theory. These authors seek to unravel what happens inside the society of the targeted state under the pressure of sanctions. They put forward various accounts of why the societal conveyor belt does not work - either because of the economic dynamics unleashed by the disruption produced by sanctions (Kirshner 1997), or because of the adverse ways in which opposition groups are affected in authoritarian states (Kaempfer and Lowenberg 1999). Their central innovation consists in the introduction of a variable endogenous to the target, namely whether it is a democratic or an autocratic political system (Grunfeld 1999, van Bergeijk 1999). Kaempfer and Lowenberg draw attention to the importance of a ‘reasonably well organized opposition group whose political effectiveness potentially could be enhanced as a consequence of sanctions’ (Kaempfer and Lowenberg 1999:52). Cortright and Lopez conclude that assessing the efficacy of sanctions requires an examination of ‘how sanctions affect the ability of opposition groups to challenge the policies of the targeted state’ (Cortright and Lopez 2000:23). Although none of these authors elaborates on how to operationalise this factor, they point to one of the central questions of sanctions theory, namely, how, exactly, economic distress galvanises political change in the target country. The idea that the internal composition of the target country is a central determinant of efficacy is still somewhat underdeveloped and has not yet been operationalised in sanctions evaluation. In any case, these attempts reflect the widely held belief that the naive theory can be transformed into a workable model capable of explaining the success and failure of sanctions by incorporating some variables -so far neglected - that might hold the key.

A second subfield seeks to explain the failure of sanctions on the basis of rational-choice approaches. These authors elaborate more sophisticated explanations for the relatively low success rate of sanctions. Their approaches depart from the ‘re-shuffling of variables’ witnessed in the mainstream literature, as they point to structural problems with the operation of sanctions. The explanations by Drezner and Tsebelis are representative of the increasing application of models borrowed from the field of economic theory to explain the effectiveness of sanctions (Tsebelis 1990, van Bergeijk 1994, Morgan and Schwebach 1997, Drezner 1999). Drezner formulates what he calls the ‘sanctions paradox’ on the basis of a conflict-expectation model. Departing from the premise that conceding in the face of economic coercion implies a redistribution of political assets between target and sender, Drezner finds that the expectation of future conflict will render the sender more willing to impose sanctions and the target less willing to concede. Hence, sanctions between allies will be less likely but more effective, while sanctions between adversaries will be more likely but less effective (Drezner 1999:5). Other authors question the belief that sanctions fail because they do not obtain compliance, positing that sanctions work primarily at the threat stage (Hovi et al. 2005):

Sanctions are... imposed only if the target refuses to comply. [I]f a credible threat of sanctions fails, it is usually a sign that the target does not intend to comply even if sanctions are imposed. [W]hen sanctions are imposed, there are often good reasons to expect them to fail.

(Hovi et al. 2005:482)

In conclusion, over forty years after Galtung criticised the naive theory of sanctions, it still constitutes the basis for the evaluation of sanctions efficacy. The permanence of the naive theory as the foundation on which evaluations are premised, notwithstanding the fact that its fallacy has been widely demonstrated, is probably due to the fact that no better explanatory model for the success of sanctions has yet been developed.

Sanctions that ‘create conditions’

Sanctions that have failed to coerce a target into acquiescing to the sender’s demands are, nonetheless, frequently credited with having created the ‘necessary conditions’ for a policy change. This assumption equates to the identification of a third mode of operation, in which the leadership is eventually unseated, although not with the immediacy originally expected. Examples abound. Cortright and Lopez argue that while sanctions against South Africa were not originally judged successful, they ‘set the stage for other internal events that led to the dismantling of apartheid’, making ‘a major contribution to fundamental political change’ (Cortright and Lopez 1996:8). Commenting on the Rhodesian case, Elliot contends that the ‘impact of sanctions over time increased the pressure on the white regime and ultimately contributed in a modest way to the desired outcome’ (Elliot 1998:56). According to Hufbauer and his collaborators, Indian sanctions against Nepal in 1989/90 triggered a democratisation crisis that ultimately led to the desired reorientation of Nepalese security policy (quoted in Pape 1997:105).

The way in which sanctions accomplished their objectives in these cases differs from the definition of success formulated above: sanctions failed to bring about a change in the conduct of the target government. Still, they are held to have been successful in setting the stage for internal change. These authors thus suggest that there exists an indirect path for sanctions to reach their objectives. The problem here is that these claims are difficult to demonstrate. Pape has expressed some methodological uneasiness with the linking of economic sanctions to internal political change in the abovementioned case of the Indian sanctions against Nepal. He contends that although the Indian sanctions did cause some dissatisfaction with the regime in 1989, ‘we do not know what role they played in the opposition leader’s decision in February 1990 to call the general strikes that led to the regime’s collapse’ (Pape 1997:105). This p...

Table of contents

• Front Cover
• European Union Sanctions and Foreign Policy
• Routledge Advances in European Politics
• Title
• Copyright
• Contents
• List of Tables
• Acknowledgements
• Abbreviations
• Introduction: Why investigate the efficacy of EU sanctions and how to go about it
• 1 Sanctions and their efficacy
• 2 EU sanctions: Evolution, legal framework and policy
• 3 What determines the efficacy of EU sanctions?
• 4 The efficacy of sanctions imposed under the Common Foreign and Security Policy
• 5 The efficacy of ‘informal’ sanctions
• 6 The efficacy of development aid suspensions in the context of the partnership agreements between the EU and the African-Caribbean-Pacific Group
• 7 Withdrawal of trade privileges under the Generalized System of Preferences
• 8 Sanctions theory and the efficacy of EU sanctions: Some fresh air coming into the sanctions debate
• Annex I: Overview of variables (dataset)
• Annex II: Truth table
• Notes
• Bibliography
• Index