Can Sanctions Help Save Ukraine?

Sanctions are one of the most frequently used tools of U.S. foreign policy and are serving now, along with military and economic aid for Ukraine, as the principal means of countering Putin’s war of aggression. The international sanctions against Russia are the toughest and most extensive ever imposed on that nation. More than thirty countries, representing more than half of the world’s economy, are joining in an unprecedented multilateral attempt to lock down the world’s eleventh-largest economy. The sanctions have barred Russian access to the global financial system and frozen the foreign assets of its state bank and of hundreds of Russian oligarchs and senior officials. Global export controls are blocking Russian access to high-tech components and semiconductor products that are essential for economic growth and advanced weaponry. The United States and its European partners are embargoing Russian coal and oil and reducing imports of natural gas, jeopardizing the Kremlin’s main source of state revenues. Hundreds of private companies have shuttered their operations and left the country, accelerating an exodus of Russian tech workers and further depleting the economy.

The sanctions are imposing serious costs in Russia and may be constraining the military’s ability to repair and replace damaged equipment. Still, whether sanctions can be successful in ending the war and reversing Russian aggression remains uncertain. What can we realistically expect from the use of sanctions against Russia? What are the moral and political implications of using this tool? Past examples may help us answer these questions.

The use of international sanctions in foreign policy dates back more than a century to World War I and the League of Nations. The modern era of sanctions and their emergence as a common instrument of international policy began in 1990 as the United Nations Security Council, freed from the constraints of the Cold War, reacted to Saddam Hussein’s invasion of Kuwait by imposing an oil embargo and comprehensive trade sanctions against Iraq. This was followed by the use of Security Council sanctions in Yugoslavia, Liberia, Libya, and other countries to achieve various purposes: ending civil wars, countering terrorism, and preventing nuclear proliferation. My colleague George A. Lopez and I wrote about this period in our book The Sanctions Decade. Since then the United Nations has entered a seemingly permanent sanctions era. As of this writing, the Security Council has more than a dozen sanctions in place.

Over the past two decades the United States has also greatly increased its use of economic sanctions: it now has more than 9,400 measures in place against individuals and entities in dozens of countries. The European Union has also become a major sanctions actor and is applying “restrictive measures” in many countries as part of its common security and foreign policy. The African Union has also attempted to use sanctions against states on the continent to uphold international norms and prevent military coups.

Despite their widespread use, however, sanctions often fail to achieve their intended purposes and are hampered by weak implementation, poor design, and a lack of international cooperation. They tend to stimulate corruption and the growth of illegal economies. They often inadvertently impede the work of humanitarian agencies and independent civil-society groups. In some cases, sanctions also cause severe hardship for vulnerable populations. They may be a form of collective punishment against ordinary people who have no say in decisions that violate international norms. Sanctions can generate a rally-round-the-flag effect that increases nationalist sentiment in affected countries. In Russia, Putin gained in popularity after sanctions were imposed, as the Kremlin blamed the United States and NATO for the hardships people were experiencing.

Nicholas Mulder’s important new book The Economic Weapon: The Rise of Sanctions as a Tool of Modern War has arrived at an opportune moment, just as the West is urgently reassessing the effectiveness of sanctions. A historian of twentieth-century Europe and international relations, Mulder offers a richly documented and illuminating analysis of how sanctions emerged during negotiations at the end of World War I as a primary tool for attempting to prevent another military conflict. During the war, sanctions had been used as part of the Entente strategy of military attrition and economic blockade to defeat the Central Powers. The leaders who gathered at Versailles sought to transform this weapon of war into an instrument of peace, although tension between the two missions persisted through the interwar years. That duality continued into the modern era and is evident today, as sanctions against Russia are being used in combination with active support for Ukrainian armed defense.

At Versailles President Woodrow Wilson was the principal advocate of using sanctions to enforce international security. He considered sanctions a force more powerful than war, “a silent, deadly remedy” that would impose “absolute isolation” to bring “a nation to its senses.” The Versailles agreement gave legal recognition to sanctions as an instrument of collective security in the newly formed League of Nations. Article 16 of the League’s Covenant stipulated that, if any nation initiated a war against another nation, all member states would “undertake immediately to subject it to the severance of all trade or financial relations [and] the prohibition of all intercourse between their nationals and the nationals of the covenant-breaking State.”

During the 1920s the League used sanctions successfully to prevent local disputes in the Balkans from escalating into wider war. Diplomats used the threat of sanctions to convince Yugoslavia to settle its dispute with Albania in 1921, and again in 1925 to prevent war between Greece and Bulgaria. These and other cases illustrated the power of the threat of sanctions, defined by Mulder as “deterrence through the threat of use.” For a time it seemed that the League could use sanctions as a viable instrument for peace. When Japan invaded Manchuria in 1931, however, no measures were imposed. When sanctions were imposed against Italy in 1935 for its invasion of Ethiopia, the major powers refused to include an oil embargo—the one measure that might have stopped Italy’s army in its tracks, as Mussolini later admitted. The League did nothing to stop the Nazis and became increasingly irrelevant and powerless to prevent aggression and the growing menace of another world war.

Mulder agrees with most scholars that Western leaders should have taken stronger measures against the fascist powers. He cites the “duplicity of imperialist motives” in 1935, as Britain and France refrained from tougher sanctions against Mussolini while their foreign secretaries secretly agreed to divide up Ethiopian territory and cede most of it to Italy. He recounts the League’s inaction in Manchuria and the British-French “surrender” of Czechoslovakia to Germany.

Mulder departs from the usual analysis, however, with his controversial thesis that sanctions during the 1930s accelerated the political and economic disintegration that led to World War II. He contends that sanctions aggravated international tensions and accelerated Hitler’s aggressive expansionism. The Nazis were motivated by a fear of sanctions, he contends, which spurred their aggressive drive for control over external territories to gain access to oil and natural resources. This phobia of sanctions prompted a policy of Blockadefestigkeit, “blockade resilience,” as Germany sought to achieve economic self-sufficiency.

Vladimir Putin has had a similar motive for increasing Russian economic self-sufficiency through the policy of import substitution. The Kremlin launched the program in response to the partial sanctions the United States and other countries imposed after the takeover of Crimea and the initial Russian incursion into the Donbas in 2014. Putin’s goal was to make Russia economically self-sufficient by strengthening domestic industries and reducing dependence on foreign imports of technological components. This quest to create resilience has been mostly unsuccessful, failing to overcome the chronic weakness and low productivity of Russia’s economy.

Mulder’s argument that the fear of sanctions is what motivated Hitler’s drive for war is hard to credit. Why would the Nazi leadership have worried about such toothless measures? After all, they had watched as the League of Nations imposed partial sanctions against Italy in 1935, and these did not prevent Mussolini from conquering Ethiopia. The Nazis were emboldened when the West either did nothing or offered concessions to their aggressive moves in the Rhineland, Austria, and the Sudetenland. Hitler and the Nazi leadership had little to fear from sanctions.

Mulder gives away his argument when he observes that the German economy was in relatively good shape in 1939 and had achieved a “measure of resilience” against sanctions. That resilience depended on the absence of military mobilization, however. When Hitler’s war preparations accelerated, economic needs grew. It was the militarization process, not sanctions, that generated economic needs that were to be met through conquest.

Mulder is on firmer ground in arguing that the U.S., British, and Dutch policy of imposing sanctions and an oil embargo against Japan played a major role in prompting Tokyo’s 1941 decisions to conquer parts of Southeast Asia and later attack Pearl Harbor. Japan sought control of the region’s oil and natural resources to sustain the voracious demands of its war economy. Still, as in Germany, military mobilization and imperial aggression created economic needs that prompted a war of conquest. Sanctions catalyzed the process but were not the fundamental cause.

Mulder applies his thesis to the present, arguing in the introduction to his book that sanctions today are “aggravating tensions within globalization.” In a recent article in Foreign Affairs, he points to the danger of sanctions prompting greater nationalism and intransigence in Russia and warns that the severe impacts of the current measures could cause global economic disruption leading to recession and destabilization. Sanctions could fail, he writes, “not because of their weakness but because of their great and unpredictable strength.”

It is important to acknowledge the economic and social costs of sanctions and the risks of attempting to cripple one of the world’s largest and most important economies. One of the significant drawbacks of sanctions is their potential for creating humanitarian harm. In his book Mulder reviews the horrific consequences of the blockades imposed during World War I and in the years afterwards. He cites scholarly research estimating that between 300,000 and 400,000 people perished in Germany and Austria-Hungary and 500,000 people in the Ottoman provinces of the Middle East as a result of the blockade imposed by the Entente powers. Sanctions were maintained after the war against Germany to enforce the onerous reparations provisions of the Versailles treaty. They were also imposed on the nascent Bolshevik government in Russia, where they compounded the effects of civil war and a famine that left millions dead.

A similar humanitarian tragedy unfolded in Iraq in the 1990s, when the combined effects of the UN oil embargo and general trade sanctions and the devastation caused by intensive bombing during the 1991 war led to economic collapse and massive social suffering. Malnutrition and disease spread widely, leading to a significant rise in infant and child mortality. Estimates vary widely, but it’s likely that there were hundreds of thousands of preventable deaths.

Following the disaster in Iraq, the United Nations shifted to more targeted sanctions, including arms embargoes, travel bans, and financial sanctions. This shift reduced the negative side effects of sanctions but did not eliminate them. The United States has recently resorted to severe forms of financial sanctions, locking down banks and entire financial systems and blocking access to international financing. New research shows that system-wide financial sanctions are causing serious economic dislocation and social hardship in Iran, Syria, and Venezuela.

The sanctions on Russia so far have not caused major humanitarian harm. Food and medicine are exempted from sanctions and Russia is self-sufficient in agriculture and food processing, so its people are unlikely to face greater hunger and disease. The bite of financial sanctions has led to greater inflation, however, and the effects of technology sanctions and the flight of private businesses are causing unemployment. Conditions for Russian workers will worsen the longer sanctions remain in place, and it is likely that beleaguered citizens will close ranks behind their government, blaming Europe and the United States for whatever harms they suffer. This is an argument for seeking an early end to the war through negotiations rather than pursuing a strategy of attrition through prolonged war and continuing sanctions.

Mulder calls attention to an important but often overlooked aspect of the early debate about sanctions: the provision of economic assistance. The founders of the League emphasized what they called “positive aid.” They inserted language in Article 16 of the Covenant that committed member states to “mutually support one another in the financial and economic measures.” The economist John Maynard Keynes was a strong proponent of this approach. He thought an offer of financial assistance would be an appealing inducement for sanctioned regimes to make concessions. He also believed that positive economic assistance would help to address conditions that give rise to war. He advocated a focus on “provision instead of deprivation.”

In the end, the League did not adopt these ideas, but proposals for positive aid and economic assistance were incorporated into the Charter of the United Nations in 1945. Programs of economic and social development are major elements of UN policy and are recognized widely as an essential foundation for achieving sustainable peace and preventing armed conflict. Social-science research confirms that higher levels of economic development are strongly correlated with lower risks of armed conflict.

Scholars recognize that sanctions work best when combined with positive measures. The economist David Baldwin insists on the importance of both negative sanctions and positive sanctions. He discusses restrictive measures that deny access to trade but also policies that offer assistance and opportunities for economic development. Combining the two can be the basis of diplomatic strategies to resolve conflict and enhance international cooperation.

The most attractive form of positive aid may be the offer to lift sanctions once certain conditions are met. Sanctions are not merely instruments of economic punishment and military containment. They are also tools for achieving diplomatic agreement and can be used as leverage for negotiating a political settlement. Offering an adversary such as Russia the opportunity to escape isolation, regain frozen assets, and resume normal commerce can induce political concessions.

Offers of sanctions relief have been used for bargaining leverage in a number of important cases in recent decades. In the late 1980s, the desire of South African leaders to escape international isolation and anti-apartheid sanctions was a factor in their decisions to negotiate a transition to nonracial democracy and to dismantle the country’s nuclear-weapons program. Offers to lift UN sanctions were central to negotiations with Libya in the 1990s to end its support for terrorism. At the 1995 Dayton peace process, the promise of sanctions relief helped persuade Serbian leader Slobodan Milošević to end the war in Bosnia.

Perhaps the best-known recent example of this dynamic was the 2015 Iran nuclear deal, in which the United States and its European partners offered sanctions relief in return for Iranian agreement to establish limits on its nuclear program. Under the terms of the agreement, Iran reduced its stockpile of enriched uranium by 98 percent, shut down two-thirds of its centrifuges, significantly curtailed its enrichment capacity, eliminated its ability to produce plutonium, and accepted a comprehensive and intrusive weapons-inspection system. In return, the Security Council, the United States, and the European Union lifted proliferation-related sanctions. The agreement was successful: a dozen inspection reports by the International Atomic Energy Agency confirm that Iran fully implemented the terms of the agreement. The Trump administration reneged on this deal in 2018, but that does not change the fact that negotiations based on sanctions relief helped achieve nuclear nonproliferation for as long as the deal lasted. Negotiations are now underway to restore the agreement, based on the same formula of lifting sanctions in exchange for restrictions on Iran’s nuclear program, although a final settlement remains elusive.

U.S. and British officials recognize the potential value of sanctions relief. Echoing a statement from U.S. Secretary of State Antony Blinken, UK Foreign Secretary Liz Truss stated in late March that sanctions could be lifted if Russia removes its troops. The sanctions would “come off with a full cease-fire and withdrawal, but also commitments that there will be no further aggression,” Truss said. The New York Times editorialized in support of this strategy, urging more intensive diplomatic efforts and the promise of sanctions relief as leverage to end the war. The Times called on Western leaders to specify the circumstances and conditions that would make it appropriate to roll back sanctions. These conditions should be communicated clearly and frequently to the Kremlin as an open invitation to halt their attack and withdraw their troops.

Putin gave the appearance of being interested in negotiations in the weeks prior to the invasion. Russian diplomats engaged in negotiations with Germany and France in the Normandy Format to address border issues in Ukraine, and Moscow held parallel talks with Washington on East-West security issues. Since the invasion began, however, there have been no negotiations other than humanitarian talks, and Putin remains uninterested in meaningful diplomacy. As Russian battlefield losses increase and the costs of sanctions grow, however, he may be willing to reconsider options for ending the war. The offer of sanctions relief could be a catalyst for restarting negotiations. This would shift the emphasis from sanctions as a weapon of war to sanctions as instruments of diplomacy.

Mulder may be right that the danger of sanctions lies not in their weakness but their strength, and in the overconfidence they may instill in the governments that impose them. Some observers seem all too sure that a combination of sanctions and Ukrainian military resistance will be sufficient to bring Russia to its knees. A strategy of maintaining sanctions indefinitely and prolonging the war until Russia is forced to admit defeat poses enormous risks, and will in any case lead to further loss of life and spiraling costs. If the priority is to stop the bloodshed and gain the withdrawal of Russian forces, as it must be, then the focus should be on diplomacy and the use of the peacemaking potential of sanctions to achieve a negotiated agreement.