Effectiveness Of Unilateral Sanctions And Economic Incentives example essay topic

Introduction From 1993 to 1996, sixty-one U.S. laws and executive actions were enacted authorizing unilateral economic sanctions for foreign-policy purposes. These sanctions were imposed on thirty-five countries. In 1997, seventy-five countries were affected by U.S. imposed sanctions affecting not only the targeted country but U.S. commerce and consumers. Unilateral sanctions can be defined as the applications of sanctions imposed by one country on another, for example U.S. trade with Cuba. Multilateral sanctions are those imposed upon a target country by the U.S. and its allies. "An economic sanction is defined as a restriction on normal commercial relations with the targeted country.

This basically involves restrictions on trade, investment and other cross-border economic activities". (Preeg) The effectiveness of unilateral sanctions and economic incentives, imposed or offered, by the U.S. on foreign governments to persuade the target government to follow western cultural norms is a highly debated topic. The conventional theory about how sanctions are suppose to work assumes that political change is directly proportional to economic hardship. The greater the pain caused by sanctions the higher the probability of political compliance. (Preeg) Economic Hardship vs. Political Change Religious persecution, authoritarian governments that are predisposed to violence and human rights are the root cause for sanctions.

They are designed to limit the availability of goods, foods, weapons and financial resources in the hopes that the economic hardship will be enough to persuade either a change of heart in the political powers, or bring an uprising in the masses that will allow for political reform. "The conventional theory about how sanctions are suppose to work assumes that political change is directly proportional to economic hardship, the higher the probability of political compliance". (Lopez) However, sanctions imposed upon a country, like Cuba, can prove to have a dramatic negative effect on the citizens of the country, without ever persuading change in political power and policy. The affect of decreased trade and the economic impact of sanctions can bring a lower standard of living and reduced access to medical care in the general population, while government officials often go unaffected. According to George Lopez, economic sanctions may actually strengthen a target regime and generate a "rally-round-the-flag" effect, thereby redirecting the hardships onto isolated or repressed social groups while insulating those in power.

The Cost of Freedom Often well intentioned, the unilateral effort of the United States government comes at a monetary and character cost. "When we act unilaterally, we damage relationships with our closest friends and allies... and weaken our ability over the long run to protect and promote our interests". (Beyond Unilateral Economic Sanctions) There is often sufficient reason for the U.S. to police the activities of foreign nations, the government needs to be cautious when they act unilaterally, because without the support of other nations, both large and small, trade with U.S. firms will cease, and other non-participatory countries will fill the trade gap. In 1980 the U.S. imposed a grain embargo against the Soviet Union. The Soviet grain embargo cost the United States about $2.8 billion in lost U.S. farm exports and U.S. government compensation to American farmers. When the United States cut off sales of wheat to protest the Soviet invasion of Afghanistan, other suppliers -- France, Canada, Australia and Argentina -- stepped in.

They expanded their sales to the Soviet Union, ensuring that U.S. sanctions had virtually no economic impact. Russia still appears to restrict purchases of American wheat, fearing the United States may again use food exports as a foreign policy weapon. (American Farm Bureau Federation) The Institute for International Economics estimates that unilateral economic sanctions cost the United States $15-19 billion in lost U.S. exports in 1995. This translates into the loss of more than 200,000 American export-related jobs.

A 1994 Council on Competitiveness report found that eight recent unilateral sanctions episodes cost the U.S. economy $6 billion in annual sales and 120,000 export related jobs. (American Farm Bureau Federation) Sanctions in the thirty-five targeted countries represent 2.3 billion potential consumers, and $790 billion worth of export goods and services. Inherent Problems with Sanctions When considering imposing sanctions against another country, our government needs to consider the negative repercussions of the sanction and weigh out the true cost. According to Ernest Preeg, there are six inherent downsides that must be taken into account. They are as follows: 1. The adverse economic impact of sanctions is likely to fall predominantly on the people in the targeted country, especially the poorest, while an authoritarian government tends to become even more repressive.

2. Unilateral sanctions, in any event, inflict relatively modest economic pain on the target country compared with multilateral sanctions, while adversely affecting U.S. commercial interests. 3. Domestic political pressures build to extend U.S. unilateral sanctions to third countries, creating problems with friends and allies. 4. Sanctions are used as propaganda by target county governments to blame internal economic problems on the sanctions and to appeal to anti = American nationalism.

5. Adverse impact on other U.S. foreign policy interests and on the U.S. leadership role. 6. The loss of U.S. private sector engagement in the target country as a positive force for political as well as economic change. Dangling Carrots "Carrots" are incentives that the government uses to attempt to persuade political forces back to the middle, without imposing trade restrictions or using military force. The use of incentives is already widely used to entice countries to trade freely with the U.S. and other nations.

These incentives come in many forms, military support, cheap interest rates, infrastructure development, humanitarian aid etc., but aid in economic development is usually the most popular and effective. "The most successful incentives strategies are those that are focused on a single objective and consistently sustained over time. When there are multiple or conflicting objectives the inducement process is likely to be confused and ineffective". (Lopez) Incentives can be either conditional or unconditional. Their effectiveness depends on the credibility of both parties to live up to their obligations. Conclusion Although sanctions do not have a "cost" associated with them, the cost to commerce and consumers is very high.

The actual good done through the implementation of unilateral sanctions is debatable. When governments set out on their own to change policy or power within another county, the affects of a sanction are minimized because their market allows another country to step in and increase their trade. The U.S. government needs to decrease the number of unilateral sanctions that it is imposing, and seek multilateral support for its cause. At times when the U.S. government must stand alone on an issue the use of incentives not sanctions must be evaluated to achieve the desired results without hurting commerce..