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Nuclear bombs and economic sanctions

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  • Kaz Miyagiwa
  • Yuka Ohno

Abstract

We examine the efficacy of trade sanctions when a target's action causes an irrevocable change in the status quo; for example, sanctions to stop a target's nuclear weapons development program. We find that when a sanctioning country cannot precommit to maintain sanctions long after a target becomes a nuclear power, sanctions are not only inefficacious but they backfire, spurring a target to intensify its effort to complete the nuclear program. If the nuclear program has several stages to complete, gradually increasing sanctions as the nuclear threat becomes more imminent may also backfire even though the program is potentially stoppable when sufficient pressure is applied earlier on. We also discuss the policy implications of our analysis.

Suggested Citation

  • Kaz Miyagiwa & Yuka Ohno, 2015. "Nuclear bombs and economic sanctions," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 635-646, October.
    • Handle: RePEc:wly:soecon:v:82:y:2015:i:2:p:635-646
    DOI: 10.1002/soej.12031
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    References listed on IDEAS

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    7. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908, Elsevier.
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    1. Olivier Massol & Emmanuel Hache & Albert Banal‐Estañol, 2024. "Trade sanctions and international market integration: Evidence from the sanctions on Iranian methanol exports," The World Economy, Wiley Blackwell, vol. 47(2), pages 637-663, February.

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