Sanctions and the Ukraine: What Can We Learn from the Literature?

Abstract

Russia’s invasion of Ukraine represents the biggest security challenge facing Europe since World War II. In response, countries around the world have imposed an unprecedented array of sanctions. Never before has the global community worked so quickly and efficiently to cut off a country economically from the rest of the world, and never has such a powerful country been hit so hard by economic weapons.

Sanctions so far include the whole gamut of available tools. There are unprecedented penalties on Russia’s central bank, which has seen its US assets frozen. Most Russian banks were ousted from the SWIFT, the inter-bank messaging service. Two huge banks tied to Russia’s defence industry have been targeted and restrictions have been placed on purchasing Russian debt.

Top Russian officials including Vladimir Putin and Foreign Minister Sergei Lavrov have been personally targeted, along with other oligarchs. To reduce Russian military capabilities, the US has restricted the export of high-tech products such as computers and semi-conductors, while the EU has restricted exports to Russia in the energy, transport and technology sectors. Germany stopped certifying the Nord Stream 2 pipeline and the US and other countries are moving to ban imports of Russian oil and gas.

The sanctions regime is still evolving, not all are working as was intended, and it is too soon to predict the outcome of this unprecedented effort. But there is a rich literature on sanctions that can help us identify the questions to be asked about their possible impact on the situation in the Ukraine. In this short note, we present a series of findings about sanctions culled from the literature, and discuss how each may play out in the Ukraine.

Keywords: Russia, Ukraine, Sanctions, Economic weapons, Putin, Lavrov, Russian Invasion