Asphyxiation by Sanctions: Harm, Fear and Smog

The current century has witnessed a deluge of economic sanctions, with the attendant entropy. Formal empirical findings of researchers suggest that sanctions have been, for the most part, inefficacious in realising the diplomatic objectives of sanctioners. The lens through which the broader subject is analysed can, perhaps, benefit by: (i) explicitly recognising and incorporating externalities; (ii) an acknowledgement that degrading a target economy is a time-consuming process rather than an event and (intermediate) outcomes should be appropriately granularised (active sanctioners may already be doing this); and (iii) lifting the smog by distinctly estimating the incidence on diverse stakeholders of the welfare cost of sanctions, countersanctions, and secondary sanctions (including linked threats); these pose a global risk as sources of systemic economic-financial policy uncertainty. The extant gaps in the work of multilateral financial institutions belie their role as unbiased arbiters of assessing policies of their members.