Nuclear bombs and economic sanctions

Kaz Miyagiwa and Yuka Ohno

Southern Economic Journal, 2015, vol. 82, issue 2, 635-646

Abstract: We examine the efficacy of trade sanctions when a target's action causes an irrevocable change in the status quo; for example, sanctions to stop a target's nuclear weapons development program. We find that when a sanctioning country cannot precommit to maintain sanctions long after a target becomes a nuclear power, sanctions are not only inefficacious but they backfire, spurring a target to intensify its effort to complete the nuclear program. If the nuclear program has several stages to complete, gradually increasing sanctions as the nuclear threat becomes more imminent may also backfire even though the program is potentially stoppable when sufficient pressure is applied earlier on. We also discuss the policy implications of our analysis.

Date: 2015
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https://doi.org/10.1002/soej.12031

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:82:y:2015:i:2:p:635-646

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