Ken Rogoff Warns Economic Sanctions Don't Work; Fears Violence, Not Bargaining

Tyler Durden's picture

Authored by Ken Rogoff, originally posted at Project Syndicate,

With Western economic sanctions against Russia, Iran, and Cuba in the news, it is a good time to take stock of the debate on just how well such measures work. The short answer is that economic sanctions usually have only modest effects, even if they can be an essential means of demonstrating moral resolve. If economic sanctions are to play an increasingly important role in twenty-first-century statecraft, it might be worth reflecting on how they have worked in the past.

As Gary Hufbauer and Jeffrey Schott note in their classic book on the topic, the history of economic sanctions goes back at least to 432 BC, when the Greek statesman and general Pericles issued the so-called “Megarian decree” in response to the abduction of three Aspasian women. In modern times, the United States has employed economic sanctions in pursuit of diverse goals, from the Carter administration’s efforts in the 1970s to promote human rights, to attempts to impede nuclear proliferation in the 1980s.

During the Cold War, the US also employed economic sanctions to destabilize unfriendly governments, especially in Latin America, though they do not appear to have played more than a minor role, even where regime change eventually occurred. Economic sanctions on Serbia in the early 1990s did not deter the invasion of Bosnia. Certainly, the US government’s symbolic punishment of chess legend Bobby Fischer (for playing a match in Belgrade that violated sanctions) provided no relief for the besieged city of Sarajevo.

The old Soviet Union played the sanctions game as well – for example, against China, Albania, and Yugoslavia. It, too, did not have much success, except perhaps in the case of Finland, which ultimately bent its policies to gain relief from sanctions imposed in 1958.

Most modern cases of sanctions pit a large country against a small country, though there are a few cases involving countries of equal size, such as the long quarrel, from the 1950s to the 1980s, between the United Kingdom and Spain over Gibraltar.

As Hufbauer and Schott, among others, have illustrated, the effects of sanctions are often fairly disappointing – so much so that many scholars have concluded that such measures often are imposed so that governments can appear to domestic audiences to be “doing something.” Certainly, severe US sanctions on Cuba failed to bring the Castro regime to heel; indeed, President Barack Obama’s move to reestablish full diplomatic relations may have more effect.

But sometimes sanctions do work. The strong international consensus to impose sanctions on South Africa in the 1980s eventually helped bring an end to apartheid. Likewise, sanctions have helped bring Iran to the bargaining table, though it is not clear how long its government will be willing to defer its nuclear ambitions. And the Russian economy today is in big trouble, though this might be described as a lucky punch, with the real damage being done by an epic collapse in global oil prices.

Some in Russia, where the price collapse has hit government revenues hard, claim that the US and Saudi Arabia are conspiring to bring Russia to its knees. But that gives US strategists far too much credit. A more likely culprit for the steep price decline is a combination of the shale-energy revolution in the US and the sharp slowdown in Chinese growth. China’s slowdown has helped precipitate a broad-based fall in commodity prices that is having a devastating effect on countries like Argentina and Brazil, with which the US authorities presumably have little quarrel.

One of the major reasons economic sanctions have fallen short in the past is that not all countries have complied. Indeed, significant differences of domestic opinion in the imposing country often undermine sanctions as well.

Moreover, countries imposing sanctions must be prepared to address their own vulnerabilities. North Korea is perhaps the most noxious regime in the world today, and one can only hope that its cruel government collapses sometime soon. The Kim regime has clung to power despite being subject to severe economic sanctions, perhaps because China, fearing a united Korea on its border, has not yet been willing to withdraw its support.

Yet it is easy to forget that there are different viewpoints in international relations, even in the most extreme situations. Though North Korea’s alleged attack on Sony Pictures’ computers has been rightly condemned, it must be admitted that from the perspective of the North Korean elite, their country simply applied economic retaliation much like anyone else does. Sony Pictures had produced a satire poking fun at North Korea’s leader, the “Young General” Kim Jong-un. This was an intolerable affront, to which the elite responded with economic sabotage rather than military action.

Let us also not forget that Russia, too, has deployed cyber attacks in the service of foreign-policy goals. Indeed, Russia has far more formidable hackers than North Korea (though much of the top talent currently is employed in mafia rings, rather than in strategic operations).

In a world where nuclear proliferation has rendered global conventional war unthinkable, economic sanctions and sabotage are likely to play a large role in twenty-first-century geopolitics. Rather than preventing conflict, Pericles’s sanctions in ancient Greece ultimately helped to trigger the Peloponnesian War. One can only hope that in this century, wiser heads will prevail, and that economic sanctions lead to bargaining, not violence.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
basho's picture

"Though North Korea’s alleged attack on Sony Pictures’ computers has been rightly condemned, "

is this on again or is K.R. off.

Global Hunter's picture

I believe K.R. is off, I don't watch/read much MSM but I think they just kind of let that story dangle and float with the breeze so if one didn't come to ZH or Politico that day one might have missed it.

rwe2late's picture

 Despite N Korea apparently being wrongly accused,

the Obama administration is imposing new economic sanctions on N Korea.

http://www.globalresearch.ca/us-to-impose-sanctions-on-north-korea-over-...

 

Real US motive appears to be to derail reconciliation talks between North and South Korea.

http://news.antiwar.com/2015/01/02/obama-sanctions-north-korea-citing-di...

 

tplink's picture
tplink (not verified) basho Jan 4, 2015 2:20 AM

my co-worker's ex-wife makes $84 every hour on the internet . She has been laid off for six months but last month her check was $18827 just working on the internet for a few hours. go to this website... www.works3.com

Barnaby's picture

Oh God they referenced the Peloponnesian War.

Knowing Greeks I recommend 5-gage corks for the anus of every man over the age of six.

Barnaby's picture

Never been to Greece, I guess? Protect your pod bay door if you go there.

jm's picture

Sanctions curtail the capacity for rouge states to invade other coutries.  It forces them to monetize expense rather than borrow, which bring out the pitchforks back home when food costs spike 30% a month.

Economists really need to reassess their role before they are completely discredited.

 

The North Korea part of the op ed is silly.  Korean unification is coming.  I' would imagine that North Korea is busy tranferring nuclear tech to South Korea prior to this getting papered over.

breadonwaters's picture

 

 

....that would be "ROGUE" states .....as against one wearing makeup....tee hee hee....

jm's picture

lol.  Hard to type on an ipad and I'm not a great speller.

breadonwaters's picture

 

 

...Is all in fun ....i miss-type also.

i_call_you_my_base's picture

'Mistype' is a word and needs no hyphenation.

jm's picture

It was the autocorrect's fault.

logicalman's picture

spelling police were all over me last night.

Thing is, I can spell pretty well, it's my keyboard skils that let me down.

 

Max Steel's picture

but still one rogue and shameless nation usa didnt stop its act of chaos amid sanctions . Oh! I forgot they are an exception in crime against humanity .

Dickweed Wang's picture

Sanctions curtail the capacity for rouge states to invade other coutries.  It forces them to monetize expense rather than borrow, which bring out the pitchforks back home when food costs spike 30% a month.

Please provide ANY evidence that validate these statements.  Oh, that's right, you can't . . . .

jm's picture

In the case of Russia, which is really what I am referring to, WSJ reported yesterday (section C, page 3) that the Putin regime just gave $660 million to Gazprombank and about aquarter of that to another small-time bank.  They have also put money into other players in the financial system, not sure how much.  They are trying hard not use up all their FX reserves (read USD), whichI thought they would do rather than jack interest rates and kill the economy.  Things were probably worse than I thought.  Instead, they killed the economy... they are just trying to stav eoff defaults at this point.  Russia is erratic like that... they did a similarly wired thing during the LTCM blow-up with their local currency bonds.  this latter point is well-documented in the financial crews. 

Anyway, once those FX reserves are gone it's curtains...that's when the defaults come in.  And will see collapse, real collapse.  The only possibility is to print, print, print to pay for government prioirties.  And inflation will be chronic.  Russia saw this persistently in the early nineties after the wall fell.  this is well docuemnted as well.  Not sure what inflation will look like, but a 40% decline in the ruble makes 30% inflation look about right. 

Not loving it, not hating it, it just is.  My objective is to understand what is going to happen, and get intel.  I am not selling what I want to happen or cheerleading any side.  But I know who has the upper hand and I know who invaded/annexed part of another country

Someone mentioned the Pelopnnensian war here, or maybe on another post I just read.  Pericles' paraphrased message resonates today.  "When you are a Rogue state, don't let illusions of grandeur go to your head.  The established order has a natural duty to kick the crud out of you. It is like dogs eating:  rogues get the scraps." 

 

d2thdr's picture

Russell Napier on his ERIC blog conclusively proved reserves do not matter in the current era of fiat currency, where the reserve itself is fiat currency.

jm's picture

When you owe dollars (external fiat) and you print rubles (home fiat), you pay in dollars they are anything but worthless and printing rubles helps nothing.  You are taking Russell Napier out of context, because he's not an idiot.

wmbz's picture

"One can only hope that in this century, wiser heads will prevail, and that economic sanctions lead to bargaining, not violence"


Wiser heads?

That's fucking funny!

It's these "wise" heads that the moron voters keep voting for that have gotten us into this god foresaken mess!

Ain't no stopping it now...This bitch is gonna blow!

Global Hunter's picture

Ain't no stopping it now...This bitch is gonna blow!

I had a lot of hope and faith that people around me were waking up and getting it and there would be a mass awakening but lately I share this sentiment.  I don't know if its because this winter has seen a lot of dark grey cold damp days with little sunlight and it has influenced my perceptions, but a lot of the people around at work and play seem to have mentally just checked out and gone to crazy town.

Thank god for my wonderful wife and daughter provide some sanity, if I could just hunker down full time I would.

Dickweed Wang's picture

One can only hope that in this century, wiser heads will prevail, and that economic sanctions lead to bargaining, not violence.

How about this one?  Sit down like grown-ups and negotiate/bargain WITHOUT extorting one or more parties by the implementation of sanctions. The premise of this guy's statement is typical (western/USA) hegemonic bullshit.

lolmao500's picture

Sanctions against Iraq were a huge success! 500 000 civilians dead!

Renewable Life's picture

Don't forget 50,000 killed and wounded Americans and Europeans!!!!

rwe2late's picture

 And "worth it" according to Madeline Albright

http://video.search.yahoo.com/search/video;_ylt=AwrBT8CDSqhUPioAuLVXNyoA...

 

["worth it" no doubt because they were "only" Iraqis.

Had they been Israelis, or banksters, or Pentagon "warriors"

the "worth" of "it" might not have been so readily pronounced as enough.]

Dickweed Wang's picture

Sanctions against Iraq were a huge success! 500 000 civilians dead!

And only 100,000 dead or disabled kids to boot!!

Ignatius's picture

"Wiser heads"

Wiseguys.

kaiserhoff's picture

Sanctions are sloppy foreign policy and a very blunt instrument,

  but they sure created an attitude adjustment on Russia.

Dickweed Wang's picture

but they sure created an attitude adjustment on Russia.

Yeah, those sanctions are sure isolating Russia . . . .

Grouchy-Bear's picture

Don't think so Kisseroff..

Russia doing just fine...

Dathedr's picture

"Economic sanctions on Serbia in the early 1990s did not deter the invasion of Bosnia. Certainly, the US government’s symbolic punishment of chess legend Bobby Fischer (for playing a match in Belgrade that violated sanctions) provided no relief for the besieged city of Sarajevo."

 

 

Only an idiot or Zionist scum cour write something like this ^^! First off, there is no counry called "Bosnia." There is a Western colony called Bosnia and Herzegovina, and that colony is made of 2 parts: Republic of Serbska and Federation of Bosnia and Herzegovina (of Croat and Bosnian part *how they call themselves today, for prior to becoming Bosnians in 1993. they called themselves Muslims, and before that Croats and Serbs of Muslim faith, and before that they were Turks for 500 yrs*). And there was no invasion from Serbia into any part of territories of former Yugoslavia - 1,5 milion Sebs fought against 2 milion Muslims (today Bosnians) a civil war in Bosnia and Herzegovina, and 600.000 Serbs fought 4,5 milion Croats in Croatia, which was also a civil war. At least the Zionist scum should get their fact straight, lying filth!

 

But just look at these colonial flags, they really tell a whole "story": 

http://en.wikipedia.org/wiki/File:Flag_of_Bosnia_and_Herzegovina.svg

http://flagpedia.net/data/flags/ultra/ks.png

And here is EU flag:

http://en.wikipedia.org/wiki/File:Flag_of_Europe.svg

 

p.s.

Notice how Zionist workers are busy on that English Wikipedia page. "Flag of Europe." Scum!

// '; filtry.appendChild(div); }); })(); // ]]>// '; filtry.appendChild(div); }); })(); // ]]>

// '; filtry.appendChild(div); }); })(); // ]]>

// '; filtry.appendChild(div); }); })(); // ]]>// '; filtry.appendChild(div); }); })(); // ]]>// '; filtry.appendChild(div); }); })(); // ]]>// '; filtry.appendChild(div); }); })();]]>
Global Hunter's picture

Dathedr, appreciate your post, can you tell me what the second flag is on your link?  The one below Bosnia and above the E.U. the one with what looks like a map and the stars above it.  TY

Dathedr's picture

Aye, it's a flag of Zionist's fiefdom of Kosovo. And the first colony is not "Bosnia" but Bosnia and Herzegovina. You don't call USSA Texas or Florida, or UK England, now do you? It's stupid. Bosnia is just one of the 3 countries, 3 lands, which make that Zionist colony. It's a land of Turkic Bosnian people, but there is also a land of us Serbians (Republic of Serbska) and Croats (Herzegovina). We are all subjects of Zionist occupation, but only we Serbs and Croats are not willing subjects (we were forced to accept their colony 1995), whereas Turkic Bosnians are, just like they were 5 centuries ago when they become Turks and Ottomans most loyal vassals. That's also why Zionist corporate media is always pushing with that Bosnian rethoric, because they are Zionist Empire's servants. Don't fall into that trap of Zionist parasite!

// '; filtry.appendChild(div); }); })(); // ]]>// '; filtry.appendChild(div); }); })();]]>
Jacksons Ghost's picture

He is assuming the West/Elites  (Central Bankers) don't want war. 

breadonwaters's picture

 

Besides, The US economy is too weak to push anyone around ....so they had Europe do it .......

weburke's picture

" nuclear proliferation has rendered global conventional war unthinkable" must you? not your area of expertise. 

 

kchrisc's picture

"Ken Rogoff Warns Economic Sanctions Don't Work; Fears Violence, Not Bargaining"

Government is nothing more than a criminal syndicate of theft and violence, and all utterances by them are nothing more than cover for their schemes. As such then, one should understand that government always accomplishes the opposite of the stated goal. Always.

So it is not that acts of war called "sanctions" don't work, but that the "sanctions" were actually cover for someone, somewhere, to make money off of "sanctions." So they did "work," just not in the manner one was conditioned to expect, or more importantly, look for.

The banksters need to repay us.

Parrotile's picture

Wonder if the US might be able to postpone the "war" until their latest $400 billion toy actually works?? (sometime around 2019 . . . . .)

Who cares? It is not as if it is "their" money after all . . . . .

http://investmentwatchblog.com/alert-computer-glitch-stops-us-most-advanced-f-35-fighter-jet-from-firing-until-2019/

kchrisc's picture

Whether or not it ever flies, it has worked just as designed. To enrich the MIC, and rest of the profiteers.

The banksters need to repay us.

Inthemix96's picture

Mr Ken Rogoff is unfortunately correct.  There is going to be violence my friend, but not the kind your lot imagine. 

When the people understand that everything they ever believed in was a fabrication of the truth, you are going to have a problem on your hands that no one ever forecast.  The police cannot contain, and the politicians can do nothing about.  And it wont take a very large percentage of the people to serve justice.

Will it?  Now GCHQ and the NSA might wanna think about that, a touch.

Cunts

;-)

kchrisc's picture

"When the people understand that everything they ever believed in was a fabrication of the truth, you are going to have a problem on your hands that no one ever forecast.  The police cannot contain, and the politicians can do nothing about.  And it wont take a very large percentage of the people to serve justice."

I agree.

While I support non-violent resistance--Rejection: Stop Paying, Stop Playing. Stop Obeying.

The sheeple don't have an acute awareness of the elite's and power's vulnerabilities and therefore will resort to unspecified violence, rioting.

Failing in appeals to non-violent actions, it is the responsibility of those that know who is responsible for the malaise to inform the sheeple as to who, where, they are. We should take it upon ourselves to direct the sheeple's violence to those responsible, and also toward power's vulnerabilities and weak points.

The banksters need to repay us.

Above all, the DC US' power, and main vulnerability is the rather precarious dependence on the backs of the people by way of debt maintenance. With draw our backs, and the ponzi of fraud will tumble down in a heap upon them.

 

The Four Rs

Rejection: Stop Paying, Stop Obeying, Stop Playing
Revolution: It is inevitable, so prepare, as they are.
Retribution: The guilty must answer for their crimes against the American people and the Constitution.
Restoration: Restore the American people, country and Constitutional republic.
 

Inthemix96's picture

Chris,

The people I talk to daily, have a very good idea where this shit originated, and how.

Dog fucking help them.  From this side of the pond to yours, we are all in this together, are we not?

Best of luck mate, you, and yours.

:-)

Winston Churchill's picture

Good luck, and happy new year 96.

Surprising how many are waking up on this side of the pond as well.

Its the oligarchs that seem to be blythly unaware at the building resentment, from what

I can tell. I get to feel the pulse on both sides.

Parrotile's picture

ITM96 - I still maintain regular contact with former RN (QARNNS) / RAMC colleagues, NCOs and pretty senior Commissioned Ranks alike (i.e. NATO OF6 and above).

You might be pleasantly surprised to know that they are NOT prepared to "fight for Cameron", and they are certainly NOT prepared to fight for the USA . Privately, talk of widespread mutiny is circulating nicely, so the promoted "public consumption" version of reality may not be as real as your Pollies would like . .  :-D

Inthemix96's picture

Good man Parrotile, you and those you know.

Some of us cunts will go down with the ship.

You've just conversed with one.

;-)

Dickweed Wang's picture

While I support non-violent resistance--Rejection: Stop Paying, Stop Playing. Stop Obeying.

While on principle I would tend to agree with this approach, for it to work you need a buy in of 10% of the general population (minimum).  Same goes for the percentage of the population required to "wake up" in order for some type of paradigm shift to occur.  Unfortunately we are no where near those numbers on both accounts.

kchrisc's picture

Like a long journey, it starts with the first step.

I am already on the journey, when will you join me? When will you take your first steps that start you toward where we're going?

We must be on our journey to have others join the journey.

The banksters need to repay us.

 

"Fight you will. You decide whether the fight is while you're being dragged away, or while you're dragging them away."