Taehee Whang

Structural estimation of economic sanctions: From initiation to outcomes

When are economic sanctions expected to succeed? Previous studies predict that sanctions will be more effective when the issue at stake is important, when the sender and target are allied, when the target’s domestic institutions are more democratic, and when the target’s economy is dependent on the sender’s. This article subjects these explanations to an empirical test using a new fully structural estimation that employs a game theoretic model as a statistical model. The initiation and outcomes of sanctions are incorporated with the strategic behaviors of sender and target states into a unified model. The model improves upon extant models by allowing the initial choice of the sender states to be multiple, not binary. This non-binary option enables the sender states to opt for the optimal intensity level of sanctions. Findings suggest that issue salience is positively associated with the decision to impose sanctions, but not necessarily with their effectiveness. Further, allied targets tend to comply even when they can win a sanctions contest, while non-allied targets tend to resist even when they know that on average the sender is likely to continue sanctioning in the face of resistance. Since sanctions imposed from 1903 to 2002 take place disproportionately between non-allied dyads, and thus belong to the category of sanctions most likely to fail, we can begin to understand why sanctions have such a low success rate.When are economic sanctions expected to succeed? Previous studies predict that sanctions will be more effective when the issue at stake is important, when the sender and target are allied, when the target’s domestic institutions are more democratic, and when the target’s economy is dependent on the sender’s. This article subjects these explanations to an empirical test using a new fully structural estimation that employs a game theoretic model as a statistical model. The initiation and outcomes of sanctions are incorporated with the strategic behaviors of sender and target states into a unified model. The model improves upon extant models by allowing the initial choice of the sender states to be multiple, not binary. This non-binary option enables the sender states to opt for the optimal intensity level of sanctions. Findings suggest that issue salience is positively associated with the decision to impose sanctions, but not necessarily with their effectiveness. Further, allied targets tend to comply even when they can win a sanctions contest, while non-allied targets tend to resist even when they know that on average the sender is likely to continue sanctioning in the face of resistance. Since sanctions imposed from 1903 to 2002 take place disproportionately between non-allied dyads, and thus belong to the category of sanctions most likely to fail, we can begin to understand why sanctions have such a low success rate.

Designing foreign policy: Voters, special interest groups, and economic sanctions

The literature on economic sanctions has long studied sender countries’ policymaking as a simple choice between imposing sanctions to extract concessions from the targeted country and doing nothing. We depart from this simplifying assumption and analyze sanctions as a multifaceted foreign policy instrument. We argue that senders design sanction policies in response to policy preferences of two domestic constituencies. Voters expect a response to an international dispute in the form of some policy, such as economic sanctions; hence, the sender’s policymakers seek to demonstrate their competence in foreign affairs by imposing sanctions. Once the policymakers announce the use of sanctions, special interest groups that stand to experience economic losses when this foreign policy is implemented pressure the policymakers to choose sanction measures limiting such losses. As a result, the policymakers design sanction policies to include measures that will be less detrimental to special interest groups. We test our theoretical argument using the Threat and Imposition of Sanctions data and show that, while pressures from public opinion increase the likelihood of sanctions, special interest groups that benefit from the relationship with the target country are associated with a lower probability of the use of sanction measures that would impose substantial costs on domestic interest groups.

Detecting Audience Costs in International Disputes

Selection effects in crisis bargaining make it difficult to directly measure audience costs because state leaders have an incentive to avoid incurring audience costs. We overcome this inferential problem of selection bias by using a structural statistical model. This approach allows us to estimate the size of audience costs, both incurred and not incurred, in international crises. We show that although audience costs exist for state leaders of various regime types, democratic leaders face larger audience costs than nondemocratic leaders do. Audience costs can be so large that war might be preferable to concessions, especially for leaders of highly democratic states. Audience costs also increase a states bargaining leverage in crises because the target state is more likely to acquiesce if the challenge carries larger audience costs. We also find evidence that audience costs generate selection effects.

International Signaling and Economic Sanctions

Do economic sanctions serve international signaling purposes? A fully structural statistical model that employs a signaling game as a statistical model is used to investigate the existence of signaling effects of sanctions. Estimation results suggest that sanctions fail to work as a costly signal. The cheapness of sanctions prevents a target state from being able to distinguish a resolute sender state from a sender who is bluffing. When sanctions are imposed, a target rarely updates its initial evaluation of the sender state’s resolve, much less than when a military challenge is observed.

Non-governmental organizations and economic sanctionsi:

How do non-governmental organizations (NGOs) affect sanction policies? Using two datasets of sanctions and NGOs, we study whether and how US-based NGOs working in a target state can influence the threat and implementation of sanctions initiated by the USA. At the threat stage, the sender government tends to perceive NGOs as a signaling device such that NGOs increase the probability of sanction threat. At the imposition stage, the presence of NGOs in a target state also increases the likelihood of a sender state imposing sanctions. In addition, the sender state tends to implement costly sanctions when NGOs have more field operations in target states. This study provides a systematic explanation of the relationship between NGOs and sanction threat and implementation.

The Effects of the President’s Emergency Plan for AIDS Relief on the Economies and Domestic Politics of Focus Countries

Abstract President G.W. Bush’s Emergency Plan for AIDS Relief (PEPFAR) has been rated as one of the successful US aid interventions of recent decades. We investigate the impact of PEPFAR on economic development, democracy, and human rights by comparing focus countries that received PEPFAR with other countries that did not receive PEPFAR from 2003 to 2008. Moreover, we examine specific changes made within focus countries after the implementation of PEPFAR using Difference-in-Difference estimation. Our results show that PEPFAR did improve economic conditions in focus countries but had a limited impact on political conditions, that is, on democracy and human rights.

Knowing one’s future preferences: A correlated agent model with Bayesian updating

We generalize two classes of statistical sequential incomplete information games: (1) those resembling typical signaling games, in which a single agent represents each player, allowing for information to be revealed about future play; and (2) those in which each player is represented by a set of independent agents, where moves do not reveal private information. The generalized model we develop, the Correlated Agent Model, relies on a parameter, ρ, which denotes the correlation between two agents’ private information, i.e. the extent to which a player knows the future private component of her preferences. The independent agent and single agent models are special cases, where ρ=0 and ρ=1, respectively. The model also allows 0 < ρ < 1, a class of games which have not yet been considered. We apply the model to crisis bargaining and demonstrate how to estimate ρ, as well as parameters associated with utilities.