David Lektzian

The Economic Peace Between Democracies: Economic Sanctions and Domestic Institutions*

This article argues that the influence of democratic institutions in international relations extends beyond the military realm and into the economic. The authors extend Bueno de Mesquita et al.’s institutional theoryof political regimes to explain the use and variety of economic sanctions in world politics. It is argued that democracies impose sanctions more oftenthan other regime types because they encompass a greater variety of interest groups. Yet, institutional incentives for successful foreign policies lead democracies to prefer sanctioning non-democracies instead of democracies.The pacifying influence of jointly democratic regimes, then, extends into the economic realm. Further, these same institutional incentives account forvariation across regime types in the choice of sanctions used and the goalspursued. Owing to incentives to minimize harm to their public and achieve successful foreign policies, democratic regimes are more likely than non-democracies to impose financial sanctions and pursue minor foreign policy goals. The authors use the Hufbauer, Schott & Elliott sanctions dataset to empirically evaluate each hypothesis. The empirical analysis supports the argument that domestic political institutions affect the incentives of leaders and, therefore, the foreign policies of states.

Economic sanctions A blunt instrument

Economic sanctions have been referred to as a blunt instrument that the international community has often wielded without full consideration of the impact that these measures will have on the population of the targeted countries, particularly the weakest elements of society. Case studies of sanctions against Cuba, Iraq, and Yugoslavia have demonstrated the impact that sanctions can have on the availability of food, clean water, and medicine, causing many to conclude that all sanctions have extensive public health consequences. In this article, we examine the generalizability of these conclusions in a quantitative cross-national study of sanctions and their public health effects. Additionally, we compare these effects to those associated with both civil and interstate conflicts as critics have recently suggested that sanctions are not a humane alternative to armed warfare. We find that when sanctions have a large economic effect on the target they can have severe public health consequences. These consequences are substantively similar to those associated with major military conflicts. However, when sanctions have little or no economic effect on the target, they also have no substantive effect on public health. Building on recent work to explore the human consequences of war, this work also helps to demonstrate the importance of smart sanctions and humanitarian exemptions in sanctions policy.

Institutions and International Cooperation

This paper addresses a new issue in sanctions research: the determinants of the time it takes for nations to return to presanctions levels of trade after a sanctions episode ends. The authors argue that democratic institutions reduce transaction costs and promote trust between economic agents. Their primary hypothesis is that jointly democratic dyads return to their presanctions level of trade faster than nonjointly democratic dyads. To evaluate this argument, the authors have constructed an event history data set of 59 sanctions cases beginning between 1954 and 1992. The empirical analysis finds strong support for the theoretical hypothesis that democratic political institutions facilitate a return to trade. These results hold even in the presence of competing explanations, and are robust to alternative model specifications.

The Effect of Sanctions on U.S. Foreign Direct Investment

For years, the United States has imposed economic sanctions to compel countries to alter their behavior. An important concern is whether government sanctions influence private foreign direct investment (FDI) decisions, the largest source of foreign capital. In the first study to assess empirically the relationship between economic sanctions and FDI, we consider whether U.S. sanctions influence U.S. FDI inflows into targeted countries. Using panel data for 171 countries from 1965 to 2000, we find strong evidence that U.S investors pull out of countries targeted for U.S sanctions prior to their imposition. This disinvestment is not permanent and investment tends to return after the sanctions are imposed. The results provide support for FDI studies that show the effect of risk on investor decision making.

A Comparative Theory Test of Democratic Peace Arguments, 1946—2000:

Multiple theories posit the existence of a dyadic democratic peace. The authors extend the logic of three theories of the democratic peace — informational, normative, and preferences — and find that they make different predictions with respect to the onset and escalation of disputes across the range of similar regime dyads. First, regarding dispute onset, the preferences argument, but not the normative and informational arguments, expects autocratic dyads of similar type to have less conflict onset than mixed dyads. Second, the normative argument expects democratic, but not non-democratic, dyads to be less likely to escalate their disputes, while the informational argument expects democracy to have little impact, after conflict onset has been taken into account. The preferences argument expects all dyads of similar regime type to be less likely to escalate their disputes. Critical tests of these expectations are conducted by estimating a censored choice model of conflict onset and escalation, using multiple measures of interstate conflict. The authors find little support for a broader regime-similarity peace, and their findings on democratic dispute escalation favor the informational argument over the normative argument.

Taming the Leviathan: Examining the Impact of External Threat on State Capacity

This article argues that the systemic security environment influences the structure of domestic political and economic institutions. If states have been primarily created to protect one group from predation by another, then the state may visibly change as external threats rise and fall. The authors argue that political elites respond to threatening environments by enhancing the ability of the state to extract resources from society in order to protect itself. Using data from the Armed Conflict Dataset, Bankss Cross National Data Archive, and COW data from 1975 to 1995, the authors find evidence that supports the conjectured relationship between threat and state strength. As a response to a more threatening environment, the authors find that states significantly increase their capacity in terms of revenue, government spending, and military spending, but they do not easily relinquish these gains. The authors also observe that nation-state security is heavily influenced by regional regime-type patterns. State capacity increases as the regional neighborhood becomes increasingly autocratic. This suggests political elites not only regard violent conflict in the region as a serious concern to national security, but also appear to consider political change a threat as well.

The effect of foreign direct investment on the use and success of US sanctions

Although the relationship between trade and the use and success of sanctions is frequently studied in international relations, researchers have generally failed to address the importance of foreign direct investment (FDI) on sanctions despite global capital markets dwarfing the exchange of goods and services. Using panel data for 171 countries from 1971 to 2000, we test the effect of FDI on the use and success of sanctions imposed by the USA. We find evidence that a high level of economic engagement in the form of US FDI as a percentage of the recipient county’s gross domestic product reduces the likelihood of the use of US sanctions. We also find that, when sanctions are imposed, declining US FDI generally has a positive and significant effect on sanctions success. However, if non-US firms offset lost US FDI, the probability of sanctions success decreases. The results show that investors may have an important influence on foreign policy outcomes.

Economic sanctions, military interventions, and civil conflict outcomes

Sanctions are designed to reduce the amount of resources available to the targeted actor and have the potential to be an effective tool for bringing disputing sides in a civil conflict to the bargaining table by altering incentives for continued fighting. Thus, there is reason to believe that sanctions can shorten the duration of civil conflicts. However, once sides in a conflict have moved to the use of violence to settle their dispute, it is hard for sanctions, in isolation, to impose enough cost to convince warring factions that settling a conflict has greater value than what could be expected from continued fighting. In this article, we argue that sanctions, in isolation, are unlikely to affect the duration of civil conflicts. However, when sanctions are combined with military interventions they can contribute to conflict management strategies resulting in shorter civil conflicts. We test our expectations empirically using data on civil conflicts from the Uppsala Conflict Data Program Armed Conflict Database and data on economic sanctions from the Threat and Imposition of Economic Sanctions Database. Our results suggest that the best hope for sanctions to shorten the duration of civil conflicts is if they are used as part of a comprehensive international response that includes institutional sanctions and military interventions.

The great blockade of Lithuania: Evaluating sanction theory with a case study of Soviet sanctions to prevent Lithuanian independence

Previous work in political science has looked to dyadic, international, and domestic factors in senders and targets of sanctions for explanations of why they sometimes succeed and frequently fail. In this paper, we present a case study of the sanctions imposed by the Soviet Union over Lithuania’s declaration of independence in 1990. We examine the dyadic, international, and domestic factors that influenced the outcome of the sanctions and connect them to existing theoretical and empirical work in the literature. While dyadic and international factors played important roles, we find the strongest evidence for the role of domestic political factors in the Soviet Union and Lithuania in determining the outcome of the dispute.