Unmasking the Black Knights: Sanctions Busters and Their Effects on the Success of Economic Sanctions1

Abstract

Despite clear expectations that sanctions busters undermine the effectiveness of economic sanctions, most empirical studies of the phenomenon fail to find that they significantly affect sanctions outcomes. One explanation for these puzzling results is that past studies have almost all relied on Hufbauer, Schott, and Elliott's (1990) dichotomous, timeinvariant ''black knight'' variable to operationalize the occurrence of sanctions-busting. This piece develops a more nuanced account of how the timing, quantity, and nature of sanctions-busting trade affects sanctions' outcomes and codes a new set of sanctions-busting variables that capture these distinctions. Two competing accounts of sanctionsbusting are tested in the analysis, one that asserts that only politically motivated sanctions busters (i.e., black knights) negatively affect sanctions' success and one that asserts that commercially and politically motivated sanctions busters jointly undermine their success. These rival accounts are tested using a competing risks analysis of 96 episodes of US-imposed sanctions from 1950 to 2006. The results indicate that while black knights alone do not make sanctions more likely to fail, in conjunction with commercially-motivated sanctions busters they do exercise a potent, negative effect on sanctions' success. These findings have important implications for how third party responses affect sanctions outcomes.Why do economic sanctions so often fail to achieve their objectives? The international cooperation a sender state receives in imposing sanctions against a state and the support a target state receives in resisting them constitute two potentially important explanations. While the comparative effectiveness of bilateral versus multilateral sanctions is one of the central debates within the sanctions literature, much less attention has been paid to how sanctions-busting affects sanctions outcomes-and the findings in that area have been mixed. This is puzzling because spoiler states often figure prominently in qualitative case studies of why economic sanctions failed to work in high-profile cases like the United States' sanctions against Cuba. During the Cold War, the Soviet Union served as Cuba's chief sanctions-busting patron-providing it with billions of dollars worth of subsidies and assistance. Following the Soviet Union's collapse, firms from Canada,

Determinants of Sanctions Effectiveness: Sensitivity Analysis Using New Data

“…1 For example, Drezner (1999) and Allen (2005Allen ( , 2008 find that sanctions against allies are more likely to succeed, but Drury (1998) and Krustev and Morgan (2011) find no support for this claim, and Nooruddin (2002) and Early (2011) find that sanctions against allies are less likely to succeed for US sanctions. Even when we consider the cost of sanctions, which many see as the most important predictor of sanctions success, the empirical findings are not conclusive (Bonetti 1998;Jing, Kaempfer, and Lowenberg 2003;Nooruddin 2002).…”

“…First, most findings reported in any one article result from one regression model (Kaempfer and Lowenberg 2007). Even though many scholars conduct tests to ensure the robustness of their findings, these attempts are often Lam (1990) [+], Drezner (1999) [+], Allen (2005) [+], Krustev and Morgan (2011) [0], Early (2011) [−], Nooruddin (2002) [−]…”

Profiting from Sanctions: Economic Coercion and US Foreign Direct Investment in Third-Party States

“…Hufbauer et al 2007. We rely on this data in part because the construction of some of our independent variables draws heavily on data generated by Early 2009, which also uses Hufbauer et al 2007 The dependent variable is a country's total of FDI inflows from US-based investors, measured in millions of real dollars. These data are provided by the US Bureau of Economic Analysis's (BEA) statistics division.…”

“…Cortright and Lopez 2000. 12. See Caruso 2003; van Bergeijk 1995 and2009;Hufbauer et al 1997;Early 2009;Biglaiser and Lektzian 2011;andLektzian andBiglaiser 2013. 13.…”

Not all dictators are equal

“…Accordingly, we assume senders to be more reluctant to target richer countries with a large economy. Earlier research has also emphasized the importance of trade (Early, 2011;McLean & Whang, 2010) and foreign direct investment (FDI) (Lektzian & Biglaiser, 2013). Higher trade levels and FDI give more economic leverage to sanctioners but also increase their costs.…”