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The impact of US sanctions on poverty

Author

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  • Neuenkirch, Matthias
  • Neumeier, Florian

Abstract

In this paper, we analyze the effect of US economic sanctions on the target countries' poverty gap during the period 1982–2011. Econometrically, we employ a matching approach to account for differences in the countries' economic and political environment and the likelihood of being exposed to US sanctions. Our results indicate that US sanctions are adversely affecting those living in poverty as we observe a 3.8 percentage point (pp) larger poverty gap in sanctioned countries compared to a control group that is as close as possible in terms of observable pretreatment characteristics. In addition, we show that the impact of sanctions on poverty (i) increases with the severity of sanctions, (ii) is larger for multilateral sanctions than for unilateral sanctions imposed by only the United States, and (iii) is long-lasting as the poverty gap increases over the first 21years of a sanction regime.

Suggested Citation

  • Neuenkirch, Matthias & Neumeier, Florian, 2016. "The impact of US sanctions on poverty," Journal of Development Economics, Elsevier, vol. 121(C), pages 110-119.
    • Handle: RePEc:eee:deveco:v:121:y:2016:i:c:p:110-119
    DOI: 10.1016/j.jdeveco.2016.03.005
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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