Kaempfer and Lowenberg anticipate and prepare with their research more targeted sanctions since the late 1990s: Sanctions can have the desired impact if they are “designed to selectively affect the appropriate interest groups.”150 The relevant task, therefore, is to identify the relevant pressure groups within the target country and to model the impact of economic hardship on these groups ←52 | 53→and the regime’s ability to reward supporters and suppress opposition.151 The ruling elite is the group which can most easily gain then rents accruing from sanctions-induced changes in terms of trade.152 The leader’s budget increases and his position is strengthened. Building on Wintrobe, Kaempfer et al. write that an autocrat builds his power on legitimation and repression.153 Repression means the elimination of opposition; loyalty means awarding rents to supporting groups. Therefore, the leader needs a re-allocation of resources. Autocrats can easily allocate scarce resources to their support groups to strengthen elite cohesion, and “redistribute resources to important socio-economic constituencies that will ensure popular, as well as elite, support for the regime.”154
In a similar approach, Kirshner writes that the pure effectiveness itself (“if they work”) is less relevant for policy makers than the question “how they function.”155 His microfoundations approach looks at how groups “within the target state are affected differentially.” This is the “key to maximizing the chances that sanctions will be successful.”156 Economic pressure on the central government and the supporting core groups can have different results: The government yields because of a cost-benefit-analysis, or the population or the core group overthrow the regime.
Wood summarizes that economic sanctions encourage the leader of the target state to increase repression of human rights. Economic sanctions deprive a leader of the resources to pay their supporting coalition. Whereas institutional constraints hinder democratic leaders to redistribute costs (and to repress human rights), autocrats can transfer the sanctions costs easier to opposition groups or the population.157 Costs are redistributed downward. If the leader succeeds in blaming external forces for the economic instability, he might profit from a rally around the flag; otherwise, he will face increasing dissent among the population and opposition groups and will see himself to be forced to increase repression.
Conventional wisdom is presented in the statement that sanctions “seemed not only to be ineffective in changing regimes, but even to entrench in power the ←53 | 54→groups they were intended to undermine.”158 Through an economic mechanism, economic sanctions influence the political system of the target state. Already Galtung criticizes the “naive theory” which claims that value-deprivation leads to political disintegration because it “disregards the simple principle of adaption.”159 The target economy will simply adapt to the new circumstances and loses its dependence on the sender.160
An unintended consequence is that sanctions may hurt the opposition groups they should help, by “strengthening the regime, triggering large-scale emigration, and retarding the emergence of a middle class and civil society.”161 In authoritarian states, comprehensive economic sanctions might redistribute the wealth to the elite and “cripple the middle class.” Sanctions have “the perverse effects of enriching the targeted elites, while simultaneously causing even greater impoverishment of civilian populations.”162 Economic sanctions increase the budget of the leader of an autocratic target state and strengthen his rule only if he can gain the profits made possible by the changes in the trade sector.163
Another consequence of economic sanctions is the deterioration of the economic security and private property rights of citizens in target countries. The regime “manipulate[s]; the domestic economic conditions through arbitrary confiscation and redistribution of private property and wealth.”164 This may include expropriation of private property, seizure of foreign exchange reserves from companies and banks, nationalization of industries, and heavy taxation. These predatory policies shall firstly compensate for the economic damage caused by sanctions and monopolize the economic resources of society, and secondly “weaken the material capabilities of the opposition to mobilize citizens against the regime.”165
The black market provides more opportunities: In Yugoslavia/Serbia, a powerful criminal class with ties to the Milosevic regime emerged in the 1990s which could benefit from the black market. While the middle class impoverished and half of the population slipped below the poverty level, 5 percent of the population have become enormously wealthy.166 Sanctions contributed to a symbiosis between ←54 | 55→political leaders, organized crime, and transnational smuggling networks, which could “persist beyond the lifting of sanctions, contributing to corruption and crime and undermining the rule of law.”167
Besides the presented economic mechanism, scholars mention psychological factors as triggers of autocratization during times of economic sanctions. Already in the 1960s, Galtung assumes “hidden forces” strengthening the target society after the application of economic sanctions.168 The result is not only a failure of the goals of sanctions but even the opposite. Not political disintegration, but even integration can be the effect of value-deprivation. This concept applies especially when the “attack from the outside is seen as an attack on the group as a whole,” and when the population of the target state cannot identify with the sender of sanctions. Galtung describes hereby a so-called rally around the flag. The regime portrays itself and the whole state as a victim of evil forces abroad. This may lead to increasing political cohesion: “The imposition of sanctions enables targeted leaders to pinpoint a clear external threat, which can be used as a focal point for a leader to unify the state.”
Many scholars since Galtung mention and elaborate on this rally-effect. Olson writes that regime legitimacy and domestic coercive capability are the main factors that explain the positive or negative political effects of sanctions.169 Even Cortright & Lopez – they tend to be sanctions-optimists – lament that sanctions hit disaffected opposition groups, whereas they provide autocrats “with leverage to create a ‘rally around the flag effect’ as a means of suppressing domestic opposition.”170 Sanctions enable autocratic leaders to demonize them as an “external threat to sovereignty and economic well-being”171 and to blame them for the failure of their own economic policy.172 Current examples are the latest sanctions on Iran and Russia. In case of religious or quasi-religious ideologies, sanctions “increase the magnitude and the persistence of religious ideology” and strengthen the theocratic regime. The material loss caused by sanctions can be replaced with religion or ideology.173
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A crucial condition for the success of democratic sanctions is a potentially successful opposition group.174 However, if oppositional groups are being hurt, it will have “perverse” consequences because an “impoverished citizenry will have fewer resources with which to oppose the regime and would therefore be cheaper to police.”175 Sanctions cause higher poverty rates which lead to unemployment and violence. They worsen government respect for physical integrity rights (freedom from disappearances, extra-judicial killings, torture, political imprisonment).176 Other scholars even found that economic sanctions lead to a rise in the rate of domestic terrorism. Primary victims of comprehensive economic sanctions are not the