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<p>What determines the success or failure of economic sanctions? Theoretical research emphasizes the anticipated costs to both sender and receiver countries, but empirical findings remain inconclusive. This study introduces a novel measure of sanction costs by developing a bilateral reliance metric, which quantifies the welfare losses incurred when trade ties are severed. The metric is derived from an international trade model incorporating multiple sectors, sector-specific trade elasticities, and intermediate production networks. Results show that while the absolute magnitude of bilateral reliance depends on the complexity of the trade model, its changes over time remain stable. Empirically, I find little evidence that the economic costs to the receiver country influence sanction success. However, there is suggestive evidence that lower costs to the sender increase the likelihood of success—a finding that holds across different model specifications, samples, and databases.</p>

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Trade reliance and the success of economic sanctions

  • 期刊论文

  • 发表日期：

    2026年6月29日

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  • Nicolas Wesseler

摘要

What determines the success or failure of economic sanctions? Theoretical research emphasizes the anticipated costs to both sender and receiver countries, but empirical findings remain inconclusive. This study introduces a novel measure of sanction costs by developing a bilateral reliance metric, which quantifies the welfare losses incurred when trade ties are severed. The metric is derived from an international trade model incorporating multiple sectors, sector-specific trade elasticities, and intermediate production networks. Results show that while the absolute magnitude of bilateral reliance depends on the complexity of the trade model, its changes over time remain stable. Empirically, I find little evidence that the economic costs to the receiver country influence sanction success. However, there is suggestive evidence that lower costs to the sender increase the likelihood of success—a finding that holds across different model specifications, samples, and databases.