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Brothers in arms: the value of coalitions in sanctions regimes

Sonali Chowdhry, Julian Hinz, Katrin Kamin and Joschka Wanner

Economic Policy, 2024, vol. 39, issue 118, 471-512

Abstract: This paper examines the impact of coalitions on the economic costs of the 2012 Iran and 2014 Russia sanctions. By estimating and simulating a quantitative general equilibrium trade model under different coalition setups, we (1) dissect welfare losses for sanctions senders and target; (2) compare prospective coalition partners; (3) investigate ‘optimal’ coalitions that maximize payoff from sanctions; (4) provide bounds for sanctions potential, that is, the maximum welfare change attainable when sanctions are scaled vertically up to an embargo, and horizontally up to a global regime. Relative to unilateral action, we find that coalitions magnify welfare losses imposed while their impact on domestic welfare loss incurred depends on the design and sectoral dimension of sanctions. Hypothetical cooperation of large developing economies such as China additionally raises the deterrent force of coalitions. Additionally, we quantify transfers that equalize welfare losses across coalition members to further demonstrate asymmetries in the relative economic burden of sanctions. In all scenarios, we implement a novel Bayesian bootstrap procedure that generates confidence bands for simulation outcomes.

JEL-codes: F13 F14 F17 F51 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Brothers in Arms: The Value of Coalitions in Sanctions Regimes (2023) Downloads
Working Paper: Brothers in Arms: The Value of Coalitions in Sanctions Regimes (2022) Downloads
Working Paper: Brothers in arms: The value of coalitions in sanctions regimes (2022) Downloads
Working Paper: Brothers in arms: The value of coalitions in sanctions regimes (2022) Downloads
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