Can Sanctions Deter Wars? The Russia-Ukraine Case

Thierry Mayer, Isabelle Mejean and Mathias Thoenig

No 21007, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We use the framework of Mayer, Méjean and Thoenig (2025) to study the geopolitical relationship between Russia and Ukraine. The model embeds diplomacy and war within a quantitative trade framework to estimate: (i) the model-implied probability of conflict over time, and (ii) the impact of different sanction regimes on this probability. We first calibrate the model under a war scenario based on data relevant to the post-February 2022 full-scale conflict, and then add counterfactual sanctions to this scenario. We find that the observed Ukraine’s decoupling from Russia after the 2014 annexation of Crimea reduced its economic exposure to war but also increased the likelihood of a full-scale conflict by lowering its opportunity cost of war. Simulation results show that the 2024 sanction package, if credibly announced in 2021 and made contingent on further aggression, would have significantly raised Russia’s cost of war and could have deterred the 2022 invasion.

Keywords: International trade; interstate conflict; Russia; Ukraine; Geoeconomics (search for similar items in EconPapers)
JEL-codes: F1 F5 (search for similar items in EconPapers)
Date: 2026-01
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