Sanctions at bay? Hegemonic decline, multinational corporations, and U.S. economic sanctions since the pipeline case

Abstract

One of the lessons drawn by many scholars from the 1982 U.S. sanctions against the Soviet-European gas pipeline was that the decline of American hegemony and the global spread of American business placed the overseas networks of U.S. multinational corporations beyond the control of the U.S. government for the purposes of economic sanctions. Through systematically examining three subsequent sanctions efforts (Nicaragua, Libya, and South Africa), this study qualifies the generalizability of this “lesson.” In none of the cases was the United States willing to incur alliance costs through applying extraterritorial controls, nor was it able to persuade American firms to substitute public preferences for private ones. Nonetheless, in each case, the U.S. government influenced corporate decision making by augmenting corporate perceptions of risk so that prudent business stategies reinforced diplomatic preferences.

On the Determinants of the Success of Economic Sanctions: An Empirical Analysis

“…Some have argued in support of this hypothesis (HSE 1990;Rodman 1995); however, the reasoning used in arguments is somewhat different from this study. By splitting sample cases into those initiated before 1973 and those after 1973, HSE (1990) find that the success rate of the pre-1973 cases was higher than that of the post-1973 cases.…”

“…By examining the sanctions cases in the 1990s, Bergeijk argues, "[the] fact that the role of the UN and the other international organizations has become more important, increases the potential scope of nonviolent approaches to diplomatic conflict resolution, such as sanctions, arbitrage, and financial compensation" (1995,(443)(444). In his interesting article, titled "Sanctions at Bay," Rodman (1995) argues that his historical case studies of the US sanctions against Nicaragua (1981-), Libya (1978-), South Africa (1985, confirm the hegemonic decline model. He asserts that since the failure of the US sanctions effort against the Soviet-European gas pipeline (1980), the decline of the US hegemony has led to the general ineffectiveness of economic sanctions.…”

Alliances and Trade with Sanctioned States

“…Firms may also violate their governments’ policies by continuing to trade with sanctioned states when such trade is profitable and the potential costs of punishment are low (Morgan and Bapat 2003). In other words, firms will seek to maximize their profits even if their actions come “at the expense of the diplomatic preferences of the[ir] home state” (Rodman 1995, 106).…”

Sanctions, Inducements, and Market Power: Political Economy of International Influence

“…38 Monitoring as well as evasion becomes a problem as firms 34 Gierbolini (1997). 35 Lowe (1997) Rodman (1995Rodman ( , 2001. 38 can also transship goods and hide the origins of fungible goods such as grains and crude oil.…”