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Understanding Economic Sanctions on Iran: A Survey

Author

Listed:
  • Farzanegan Mohammad Reza

    (Economics of the Middle East Research Group, Center for Near and Middle Eastern Studies (CNMS), School of Business & Economics, Philipps-Universität Marburg, Marburg, Germany)

  • Batmanghelidj Esfandyar

    (Bourse & Bazaar Foundation, London, UK)

Abstract

This paper surveys the literature on the economic effects of sanctions on Iran, with a principal focus on those imposed after 2006. We discuss the challenges of isolating the impacts of sanctions and evaluate recent methodological approaches used to measure causal effects. Specifically, we focus on the application of the synthetic control method to disaggregate the exogenous and endogenous factors responsible for economic underperformance in Iran. We review studies on the macroeconomic impacts of Iran sanctions and examine those that focus on the sectoral effects of sanctions. Our survey reveals a large and growing body of literature that remains incomplete. There are significant gaps in the existing research on the impact of sanctions. Iran will likely remain the most important case study as researchers seek to fill those gaps.

Suggested Citation

  • Farzanegan Mohammad Reza & Batmanghelidj Esfandyar, 2023. "Understanding Economic Sanctions on Iran: A Survey," The Economists' Voice, De Gruyter, vol. 20(2), pages 197-226, December.
    • Handle: RePEc:bpj:evoice:v:20:y:2023:i:2:p:197-226:n:3
    DOI: 10.1515/ev-2023-0014
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    References listed on IDEAS

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    1. Farzanegan, Mohammad Reza, 2009. "Illegal trade in the Iranian economy: Evidence from a structural model," European Journal of Political Economy, Elsevier, vol. 25(4), pages 489-507, December.
    2. Mohammad Reza Farzanegan, 2014. "Military Spending and Economic Growth: The Case of Iran," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(3), pages 247-269, June.
    3. Morteza Ghomi, 2022. "Who is afraid of sanctions? The macroeconomic and distributional effects of the sanctions against Iran," Economics and Politics, Wiley Blackwell, vol. 34(3), pages 395-428, July.
    4. Ghasseminejad, Saeed & Jahan-Parvar, Mohammad R., 2021. "The impact of financial sanctions: The case of Iran," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 601-621.
    5. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    6. Mohammad Reza Farzanegan & Bernd Hayo, 2019. "Sanctions and the shadow economy: empirical evidence from Iranian provinces," Applied Economics Letters, Taylor & Francis Journals, vol. 26(6), pages 501-505, March.
    7. T. Clifton Morgan & Constantinos Syropoulos & Yoto V. Yotov, 2023. "Economic Sanctions: Evolution, Consequences, and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 37(1), pages 3-30, Winter.
    8. Mohammad Reza Farzanegan & Hassan F. Gholipour & Mostafa Javadian, 2023. "Air pollution and internal migration: evidence from an Iranian household survey," Empirical Economics, Springer, vol. 64(1), pages 223-247, January.
    9. Andreas Buehn & Mohammad Reza Farzanegan, 2012. "Smuggling around the world: evidence from a structural equation model," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 3047-3064, August.
    10. Friedrich Schneider, 2005. "Shadow Economies of 145 Countries all over the World: What Do We Really Know?," CREMA Working Paper Series 2005-13, Center for Research in Economics, Management and the Arts (CREMA).
    11. Susan Athey & Guido W. Imbens, 2017. "The State of Applied Econometrics: Causality and Policy Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 3-32, Spring.
    12. Mohammad Reza Farzanegan, 2022. "The Economic Cost of the Islamic Revolution and War for Iran: Synthetic Counterfactual Evidence," Defence and Peace Economics, Taylor & Francis Journals, vol. 33(2), pages 129-149, February.
    13. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    14. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    15. Gharehgozli, Orkideh, 2017. "An estimation of the economic cost of recent sanctions on Iran using the synthetic control method," Economics Letters, Elsevier, vol. 157(C), pages 141-144.
    16. Sajjad F. Dizaji & Mohammad R. Farzanegan, 2021. "Do Sanctions Constrain Military Spending of Iran?," Defence and Peace Economics, Taylor & Francis Journals, vol. 32(2), pages 125-150, February.
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    Cited by:

    1. Cheratian, Iman & Goltabar, Saleh & Gholipour, Hassan F. & Farzanegan, Mohammad Reza, 2024. "Finance and sales growth at the firms level in Iran: Does type of spending matter?," Research in International Business and Finance, Elsevier, vol. 67(PB).

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    More about this item

    Keywords

    embargos; foreign policy; Iran; sanctions; survey; synthetic control;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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