The Effectiveness of Sanctions

In the presented paper, we develop and describe a new, multidimensional and comprehensive dataset of sanctions and embargoes. The Global Embargo Data Base (GEDB) covers all bilateral, multilateral, and plurilateral sanctions in the world over the period 1950-2016 across three dimensions: (i) sanctions are classified in six types (e.g., trade sanctions vs. travel sanctions); (ii) each sanction is associated with specific political objectives, which are classified in nine categories (e.g., policy change, prevent war, etc.); and (iii) to what degree each sanction was successful in achieving its objective. We capitalize on the latest developments in the structural gravity literature, to demonstrate how GEDB can be used to quantify the effectiveness of sanctions on international trade. Starting with a broad evaluation of the effect of sanctions by type, we gradually develop a detailed analysis of the impact of the sanctions on Iran. The sanctions were successful in decreasing Iran's trade. However, we document significant asymmetries in sanction effectiveness across the sanctioning countries and depending on the direction of trade. A counterfactual analysis translates our partial equilibrium sanction estimates into a heterogeneous but intuitive general equilibrium effects.