Economic Sanctions: Disappointing Old Wine in New Bottles

Economic sanctions are back and high on the policy agenda. They are used as ‘bloodless’ policy instruments that replace ‘hard’ wars against countries that need to alter their behaviour. Sanctions come in various types and shapes. They can be introduced both by international organisations and by individual countries. The rate of their success compared to goals varies as it may be difficult to agree on the measure of success. Basically, moderate sanctions have a greater success than total ones. Still, there are suggestions for the increase of the effectiveness of sanctions: the objectives of sanctions need to be clear; target’s weaknesses need to be located; what are the target’s capacities to absorb hits and retaliate; sanctions need to be reviewed and fine-tuned; and there should be conditions for removing sanctions. The 2022 ‘total economic and financial war’ against Russia ends the dollar-based globalisation. A new de-dollarized Bretton Woods version 3.0 financial system emerges as many countries throughout the word fear that they may fall under similar sanctions in the future. Sanctions may also be used as a handy tool to shift public attention from much bigger national and structural problems which the governments do not tackle decisively. Economic sanctions create immediate costs in both the target country and the sanctions-imposing countries. The same sanctions also create great new opportunities for innovations in the medium- and long-term which ought to be considered and turn into profits.