From the Publisher

Ninety-nine percent of studies on sanctions are obsessed with the question of whether sanctions "work." Most of the literature concludes that they do not.

Meghan O' Sullivan argues that this focus is misplaced and that blanket claims about the weaknesses of sanctions are irrelevant. Policy-makers do not care whether sanctions, per se, can be characterized as useful, any more than they are inclined to generalize about military force. What matters is whether sanctions (or any other foreign policy tool) can be counted on to deliver results in specific instances.

Shrewd Sanctions breaks new ground in moving beyond this sanctions debate to address more pertinent concerns about how sanctions fit into a post-cold war, post-9/11 American foreign policy. O'Sullivan is not preoccupied with making a case for or against unilateral sanctions. Instead, she is interested in shedding light on how, if at all, unilateral sanctions can make a positive contribution to U.S. foreign policy, particularly in a rapidly globalizing world.

O'Sullivan offers some of the most comprehensive analyses ever published of the sanctions-dominated strategies adopted by the United States toward Iran, Iraq, Libya, and Sudan. She commends policies that have succeeded in tackling one of the greatest foreign policy challenges facing the United States-state sponsorship of terrorism and the pursuit of weapons of mass destruction-and forcefully advocates policy changes where they are warranted. Shrewd Sanctions also offers broader insights into the utility of sanctions in a world marked by globalization and American power.

O'Sullivan finds that sanctions do have a role in U.S. foreign policy. But it is not the role that so many policy-makers often call on sanctions to play. Rather than using sanctions indiscriminately to isolate or punish countries, Shrewd Sanctions argues for a more nuanced strategy in the interest of getting better results. It advocates that policymakers select different sanctions strategies depending on the goals and circumstances at hand. A sanctions strategy for regime change should differ from one used for containment, which in turn should be distinct from a sanctions strategy intended to change the behavior of a government. In laying out this new approach, O'Sullivan offers broad guidelines to policy-makers wishing to choose more wisely between sanctions and other tools-and between different sorts of sanctions regime-to ensure a more effective U.S. foreign policy.

Foreign Affairs

Economic sanctions have a mixed record as a tool of statecraft. The realities of globalization and U.S. preeminence have complicated their use, even as the threats of terrorism and weapons proliferation have made them a vital instrument of national security. In this important reexamination of recent cases, O'Sullivan offers fresh insights about when and how sanctions work. She offers detailed analysis of sanctions against Iran, Iraq, Libya, and Sudan and argues that their success has hinged on a range of factors, particularly on how well a sanctions regime suits specific policy objectives; regime change, containment, and pressuring foreign-policy change each requires its own strategy. Although multilateral sanctions are desirable, O'Sullivan argues that there are still cases in which the United States might want to employ sanctions unilaterally, especially when they are only one part of a broader strategy. This shrewd book is likely to be the authoritative guide to the sanctions debate for some time.

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Shrewd Sanctions

Brookings Institution Press

Chapter One

Scholars and policymakers have long searched for the right combination of policy instruments to tackle the dilemmas of their time. Yet, in the twenty-first century, their quest is arguably more difficult than at any period in the past. Their efforts are complicated by a rapidly changing post-cold war environment, which influences both the challenges faced by the United States and the ways in which every foreign policy tool functions. This book is a piece of this constantly morphing puzzle. It examines an age-old tool, sanctions, to deal with one of the greatest challenges of the post-September 11 environment: states that support terrorism and pursue weapons of mass destruction. Those who expect that this book will either unconditionally applaud or disparage sanctions will be disappointed. Rather than seeking to strengthen either the pro- or anti-sanctions camp, this book highlights how economic tools should and should not be used in a world characterized by the post-cold war markers of globalization and American preeminence.

Economic Statecraft in American Foreign Policy

The implications of post-cold war economic and political changes for U.S. foreign policy are unfolding every day. We now recognize that globalization-the rapid movement of ideas, people, resources, and goods across boundaries and barriers-has the potential to transform the political landscape as much as the economic environment. It has brought prosperity to many corners of the world and spurred the integration of states and regions. But at the same time, globalization has created new vulnerabilities, particularly for societies as open as that of the United States. In the search for security, globalization is proving to be a cocktail of venom as well as of vitamins.

American preeminence has also brought its own complications. Unrivaled U.S. influence in the military, economic, political, technological, and cultural realms has opened new possibilities for shaping the international environment. Yet it has not freed the United States from making strategic choices or absolved it of the need to take into account the preferences of its allies and friends, particularly when addressing the transnational challenges that are part and parcel of globalization. The September 11, 2001, terrorist attacks and the responses to them-ranging from military action to the tightening of restrictions on global financial flows-were a dramatic demonstration of how post-cold war economic and political changes have shaped the threats facing the United States and its ability to address them.

Although policymakers need to understand how globalization and American preeminence affect all military, diplomatic, informational, and economic types of statecraft, this book focuses most intensely on economic tools. Such instruments will play an important role in the more "activist" U.S. foreign policy agenda that is the result of both a greater perception of threat and a grander sense of U.S. capabilities in the post-September 11 era. Although military force will be a key component in addressing many foreign policy challenges, economic tools will be a frequent accompaniment, in part because their use will be seen as a precondition for securing the support or acquiescence of other countries for U.S. military missions. Economic tools also will be a substitute for military action when the use of force is not appropriate or feasible, either because of the nature of the objectives or simply because the United States cannot undertake an unlimited number of military endeavors simultaneously. Similarly, economic instruments will be both a complement to and a substitute for diplomatic undertakings in protecting and promoting U.S. interests worldwide.

Both positive and negative forms of economic statecraft will be needed to address new foreign policy challenges and maintain other priorities abroad. The centrality and versatility of positive economic tools (better known as inducements or incentives) in advancing U.S. foreign policy interests is demonstrated by their role in one narrow, if important, realm-that of combating terrorism. In the wake of September 11, inducements helped entice countries to join U.S. counterterrorism efforts, both in a broad sense and in the concrete mission of destroying Osama bin Laden's network in Taliban-controlled Afghanistan. Incentives were of particular importance in cases-such as Pakistan-where governments risked political backlash or economic losses because of their cooperation with Washington.

Positive economic tools will be equally important in America's more activist foreign policy quite apart from their role in immediate counterterrorism efforts. They will be used with greater enthusiasm to bring stability to weak and failing states and to find solutions to transnational problems such as the spread of AIDS and other diseases. The United States and other countries also will increase their efforts to use foreign aid and technological transfers to promote equitable development and institution building in some countries, particularly now that poor socioeconomic conditions are seen not just as being of humanitarian concern but also as having security implications that extend beyond a single country's borders. Incentives may also be called upon to serve purposes such as solidifying agreements intended to halt the pursuit of national nuclear programs, as was attempted with North Korea in the 1990s.

Negative economic tools also will be a crucial component of America's more activist foreign policy agenda. They will continue to play a key role in combating terrorism. Financial measures aimed at tracking and freezing the funds of terrorist organizations and individuals related to them are already used to handicap nefarious operations. Coercive economic measures will remain essential in pressuring and isolating countries that continue to lend support to terrorist groups or provide them safe haven in defiance of U.S. demands. Countries that resist cooperating with the United States on other levels-such as in the sharing of information pertaining to terrorism-may also find themselves subject to economic pressure. Outside the counterterrorism agenda, sanctions will maintain their centrality in U.S. efforts to combat the proliferation of weapons of mass destruction, setbacks in democratization, and acts of aggression. They will also be necessary to address the burgeoning agenda of transnational issues, including international crime, trafficking in women and children, and the narcotics trade.

The focus of this book on sanctions opens the door to examining both positive and negative economic tools. Just as the imposition of sanctions is a penalty, their lifting or the prospect of it is-or should be-a real incentive.

Sanctions are a much explored, but still poorly understood, foreign policy instrument. Despite the existing wealth of studies on economic sanctions, the literature, in the words of one scholar, "is among the most contentious and inconclusive in international relations." As discussed in detail in chapter 2, little agreement exists on even the most basic questions surrounding the use of these tools. Much of the existing scholarship is not directed toward policymakers; it is more concerned with how various methodologies and assumptions influence overall assessments of whether sanctions "work." Other studies have made important policy-relevant contributions, but our understanding of how economic sanctions are best employed is still incomplete. For instance, one of the most important conclusions of the sanctions literature to date is the now widely accepted finding that sanctions are most likely to work when they are multilateral. Highlighting this reality to policymakers influenced how many of them think about sanctions and arguably contributed to a more restrained use of unilateral measures. Yet at the same time, this finding left policymakers with a fleet of follow-up questions. Under what circumstances is international cooperation in imposing sanctions most likely to be attained? In the absence of multilateral cooperation, what is the value, if any, of unilateral sanctions?

Sanctions also were deemed to be worthy of further investigation given the sharpening focus of American foreign policy on terrorism and weapons of mass destruction after September 11. Sanctions have played a major role in past U.S. strategies for dealing with both of these global challenges, particularly when the threats have come from states. Policymakers increasingly preoccupied by the need to combat state-sponsored terrorism and the proliferation of weapons of mass destruction are faced with the critical question of whether these issues can be adequately addressed with economic tools.

The conclusions of this study shy away from the simplistic, from the notion that sanctions "work" or "don't work." The reality is that the record of sanctions is mixed; as a result, both successes and failures are examined in this book. Of greater interest than whether the value of sanctions can be summed up in a phrase are the insights revealed from careful analysis of past attempts to use sanctions to deny states resources or to coerce them into changing their behavior. As this book demonstrates, the shrewd use of sanctions in these instances depends on many factors, perhaps the most important being whether the structure of the sanctions regime is appropriate to the task at hand. More often than not, the success or failure of sanctions is not a reflection of the inherent value of sanctions in some abstract sense. Instead, it is a consequence of whether the instruments were well crafted to pursue the objectives of the policymaker. A sanctions strategy designed to change a regime should look very different from one aimed at containment, which in turn should be distinct from a strategy intended to change the behavior of a government. Unfortunately, as revealed in these pages, that has rarely been the case.

A Map to What Lies Ahead

Chapter 2 sets the scene for this book by addressing broad issues surrounding the use of sanctions in the post-cold war world. It examines how economic and political realities-namely globalization and American preeminence-shaped trends in the use of sanctions throughout the first decade after the collapse of the Soviet Union. Chapter 2 also explores the status of the "sanctions debate," the often animated exchange among policymakers, scholars, and interest groups over the use of economic tools in American foreign policy. In seeking to identify the source of tension between the needs of policymakers and the work of scholars, the chapter examines the various research and political agendas behind the seemingly innocuous question "Do sanctions work?" In doing so, the chapter illuminates a number of ways in which the study of sanctions could be refined to be of greater relevance to policymakers and identifies areas concerning the use of economic tools that deserve further attention. Chapter 2 also offers a multipart methodology to assess sanctions regimes and provides a framework for exploring outstanding questions about the use of sanctions, particularly in the cases that follow.

The next section of the book includes case studies of sanctions-dominated strategies toward Iran, Iraq, Libya, and Sudan. These cases were selected as having the greatest relevance for future efforts to address the nexus of terrorism and weapons of mass destruction. Each of these countries has been officially designated a "state sponsor of terrorism" and placed on the U.S. government's annual terrorism list. Each, to varying degrees, is a suspected proliferator. And each continues in its own right to pose foreign policy concerns and problems for the United States. Collectively, as the four hardest cases in the extended geographic area of North Africa, the Middle East, and the Gulf, they are the ones most likely to shed light on the ability of sanctions to address such fundamental U.S. concerns.

The decision to examine sanctions regimes imposed largely on states rather than on entities within them or transcending them is a deliberate one. Neither terrorism nor weapons of mass destruction nor any of the other problematic behaviors targeted by sanctions can be fully or adequately addressed by limiting U.S. strategies to the state-to-state level. But such policies remain at the core of U.S. efforts. Transnational terrorist networks such as al-Qaida are reliant on sympathetic states to provide them with the support-be it in the form of finances, material or logistical help, or safe haven-necessary to sustain their operations. Similarly, although it is legitimate to worry about the use of weapons of mass destruction by nonstate actors, states are still by far the most likely source of these weapons for such groups.

Not only is this focus on states critical to today's foreign policy agenda, it also provides a fertile ground for solid scholarship and sound prescriptions. In contrast to those analyzing the fledgling, if promising, transnational efforts to block the assets of groups and individuals worldwide, researchers interested in deriving recommendations for dealing with states through economic coercion have decades of experience on which to draw. The United States has long employed sanctions as the main tool for dealing with Iran, Iraq, Libya, and Sudan. In each case, a complex web of sanctions evolved, as both the number and type of sanctions associated with being on the terrorism list expanded and the United States imposed additional restrictions on the country for other egregious behaviors. As a result, the measures in place against Iran, Iraq, Libya, and Sudan are the most comprehensive sanctions regimes that the United States maintains; the economic and, to a lesser extent, political isolation of these countries from the United States is nearly complete. These sanctions regimes therefore provide the best opportunities for investigating many aspects of the use of coercive economic pressure, be it the links between impact and effectiveness, the interaction between sanctions and domestic politics in the target country, or the wrangling over sanctions policy that often occurs in the U.S. domestic realm.

Together, the four cases also provide important contrasts. Each involves a different level of multilateral cooperation, from the most minor to the most comprehensive. In addition to having strict U.S. sanctions imposed on them, Iraq, Libya, and Sudan all endured UN measures of varying intensity; Iran, while never the object of UN sanctions, has been subject to some multilateral restrictions in addition to comprehensive U.S. ones. Collectively, these cases demonstrate how the United States has used sanctions to pursue the full panoply of policy objectives-from regime change to containment to altering relatively small elements of a target country's behavior.

Continues...

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Excerpted from Shrewd Sanctions by Meghan L. O'Sullivan Copyright © 2003 by Brookings Institution Press
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

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