Always Affecting the Wrong People? The Impact of US Sanctions on Poverty

Matthias Neuenkirch and Florian Neumeier ()

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: In this paper, we analyze the effect of US economic sanctions on the target countries’ poverty gap during the period 1978–2011. Econometrically, we employ a nearest neighbor matching approach to account for differences in the countries’ economic and political environment and the likelihood of being exposed to US sanctions. Our results indicate that US sanctions are indeed affecting the wrong people as we observe a 2.3–5.1 percentage points (pp) larger poverty gap in sanctioned countries compared to their nearest neighbors. Severe sanctions, such as fuel embargoes, trade restrictions, the freezing of assets, or embargoes on most or all economic activity are particularly detrimental and lead to an increase in the poverty gap by 6.1–7.4 pp.

Keywords: Economic Sanctions; Nearest neighbor Matching; Poverty; United States (search for similar items in EconPapers)
JEL-codes: F51 F52 F63 I32 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015
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Citations: View citations in EconPapers (3)

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Working Paper: Always Affecting the Wrong People? The Impact of US Sanctions on Poverty (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201510

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