Download Economic Sanctions: International Policy and Political by Robert Eyler (auth.) PDF

By Robert Eyler (auth.)

ISBN-10: 0230610005

ISBN-13: 9780230610002

ISBN-10: 1349535389

ISBN-13: 9781349535385

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Mechanically, financial sanctions are similar to trade sanctions. When senders sanction their “imports” of target lending (capital inflows), the sender reduces expected interest payments and income for target investors. When curtailing its domestic sources of financing for the target economy, the sender reduces funds supply, causing the target’s financing costs to increase. 11 Another type of financial sanction reduces or eliminates income flows from target assets currently held in the sender economy, essentially “freezing” the assets.

If the target continues their policy, it leads to a new game, based on the same rules and structure. The sender has the choice of stiffening or relaxing sanctions, the target reacts by continuing or acquiescing, and so on. This game is repeated until either side ends their respective actions. The sanctions and political deviations can go on forever. The repeated game is a game of attrition. The sender repeats the sanction, year after year, in an attempt to slowly unravel the fabric that allows the target to continue its actions, hoping the target will say uncle.

Drury (1998) corroborated this conclusion empirically. If sanctions act as cartels, they are subject to cheating and leakages as any collusive economic arrangements. Reducing profit incentives to either cheat on or exist outside the policy cartel’s collusive boundaries is the major challenge of diplomacy among potential sender economies. Chapters three and four look at how game, price, and public choice theories in economics may help policy makers and scholars further understand the incentives of nations to act as sanction busters.

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Economic Sanctions: International Policy and Political Economy at Work by Robert Eyler (auth.)

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