Interdependence and multilateral economic sanctions

Abstract

Multilateral economic sanctions jointly sent by the United States and its allies were studied theoretically and quantitatively. Theory provides an interdependence explanation for the current trend in economic sanctions, arguing that it constitutes an inherent motivation for the United States and its allies to act in concert to maintain the current ‘unipolar’ situation and to impede the development of any ‘multipolar’ alternative. Quantitatively, a computable general equilibrium model simulating the impact of the multilateral trade sanctions imposed in response to the Russia–Ukraine conflict was evaluated to support the interdependence view of economic sanctions. The results suggest that the interdependencies among the United States and its allies would be strengthened by sanctions, especially at the production end. By contrast, economic sanctions weaken the interdependencies between the sanction target and sanction senders, as well as between the sanction target and other major economies. The interdependencies between sanction target and world's major economies tend to be simplified, indicating a weakened role of sanction target in the global economic development.