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The impact of international economic sanctions on national economies. The Islamic Republic of Iran - a case in point

Author

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  • Caba-Maria Flavius

    (Bucharest University of Economic Studies, Bucharest, Romania)

  • Muşetescu Radu-Cristian

    (Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

This paper explores the impact of economic sanctions on national economies, with specific focus on Iran. It starts by conceptualizing sanctions in the set of economic policies and include them in the framework of economic statecraft, according to literature available. Several hypotheses that attempt to anticipate the form of sanctions are advanced, according to the intensity of geopolitical competition among the states. The analysis uses the case study of the regime of United States’ sanctions against the Islamic Republic of Iran. Tehran and P5+1 powers (the permanent members of the United Nations Security Council and Germany) agreed on a deal regulating the nuclear program of Iran - Joint Comprehensive Plan of Action, meaning that Iran would reduce its nuclear activities drastically in exchange of lifting economic sanctions. In spite of the initial enthusiasm, United States announced in May 2018 the unilateral withdrawal from the deal and reinstating the sanctions regime, spiking new tensions in the relation with Iran. As a result, the paper discusses the context in which Iran tries to pursue economic goals in order to ensure resilience, while the US imposes more pressure. In addition, the study also approaches the dilemma whether sanctions can ultimately generate political answers and at what costs. In this context, it is identifying several alternatives in the Iranian case, together with noting the limits of conceptual refinements in terms of sanctions’ theory.

Suggested Citation

  • Caba-Maria Flavius & Muşetescu Radu-Cristian, 2020. "The impact of international economic sanctions on national economies. The Islamic Republic of Iran - a case in point," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 14(1), pages 1014-1023, July.
    • Handle: RePEc:vrs:poicbe:v:14:y:2020:i:1:p:1014-1023:n:96
    DOI: 10.2478/picbe-2020-0096
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    References listed on IDEAS

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    1. Caruso Raul, 2003. "The Impact of International Economic Sanctions on Trade: An Empirical Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 9(2), pages 1-36, April.
    2. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2009. "Economic Sanctions Reconsidered, 3rd Edition (paper)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4129, April.
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    4. Smeets, Maarten, 2018. "Can economic sanctions be effective?," WTO Staff Working Papers ERSD-2018-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    5. Sajjad Faraji Dizaji & Peter A G van Bergeijk, 2013. "Potential early phase success and ultimate failure of economic sanctions," Journal of Peace Research, Peace Research Institute Oslo, vol. 50(6), pages 721-736, November.
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