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The Impact of Economic Sanctions on Income Inequality of Target States

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  • Afesorgbor, Sylvanus Kwaku
  • Mahadevan, Renuka

Abstract

In this paper, we draw on established theoretical work to analyze empirically which segments of the population in the target states bear the most cost when economic sanctions are imposed. Using a cross-country analysis of 68 target states from 1960 to 2008, we find robust empirical evidence that the imposition of sanctions have a deleterious effect on income inequality. Focusing on various sanction instruments, financial and trade sanctions were found to have different impacts on income inequality. Lastly, the adverse effect of the sanctions was more severe on income inequality when sanctions span longer duration.

Suggested Citation

  • Afesorgbor, Sylvanus Kwaku & Mahadevan, Renuka, 2016. "The Impact of Economic Sanctions on Income Inequality of Target States," World Development, Elsevier, vol. 83(C), pages 1-11.
    • Handle: RePEc:eee:wdevel:v:83:y:2016:i:c:p:1-11
    DOI: 10.1016/j.worlddev.2016.03.015
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    More about this item

    Keywords

    economic sanctions; duration of sanctions; income inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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