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International Sanctions and Internal Conflict: The Case of Iran

Author

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  • Mohammad Reza Farzanegan

    (School of Business and Economics, Philipps-Universität Marburg)

  • Jerg Gutmann

    (University of Hamburg)

Abstract

This study investigates the case of Iran to evaluate how changes in the intensity of international sanctions affect internal conflict in the target country. Estimating a vector autoregressive model for the period between 2001q2 and 2020q3 with quarterly data on internal conflict and its three subcomponents (civil disorder, terrorism, and civil war) as well as a sanction intensity index, we find that an unexpected increase in sanction intensity causes an increase in both civil disorder and terrorism risk. In contrast, the risk of civil war declines after an increase in sanction intensity. These findings for Iran indicate that higher intensity sanctions may allow sender country governments to put pressure on target country political regimes without risking an outbreak of major violent conflicts. Therefore, more intensive sanctions, may also not be helpful in inducing violent regime change.

Suggested Citation

  • Mohammad Reza Farzanegan & Jerg Gutmann, 2024. "International Sanctions and Internal Conflict: The Case of Iran," MAGKS Papers on Economics 202420, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202420
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    References listed on IDEAS

    as
    1. Matthieu Crozet & Julian Hinz, 2020. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(101), pages 97-146.
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    3. Clements, Michael P & Hendry, David F, 1995. "Forecasting in Cointegration Systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 127-146, April-Jun.
    4. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
    5. 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.
    6. Eichenberger Reiner & Stadelmann David, 2022. "Sanctions are Costly for Citizens but Beneficial for Autocrats: A Political-Economic Perspective," The Economists' Voice, De Gruyter, vol. 19(2), pages 109-123, December.
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    More about this item

    Keywords

    Sanctions; sanction intensity; internal conflict; civil disorder; terrorism; civil war; VAR model; Iran.;
    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

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