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On Target? Sanctions and the Economic Interests of Elite Policymakers in Iran

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  • Mirko Draca
  • Jason Garred
  • Leanne Stickland
  • Nele Warrinnier

Abstract

How successful are sanctions at targeting the economic interests of political elites in affected countries? We study the case of Iran, using information on the stock exchange-listed assets of two specific political entities with significant influence over the direction of Iran’s nuclear programme. Our identification strategy focuses on the process of negotiations for sanctions removal, examining which interests benefit most from news about diplomatic progress. The results indicate the ‘bluntness’ of sanctions on Iran, but also provide evidence of their effectiveness in generating substantial economic incentives for elite policymakers to negotiate a deal for sanctions relief.

Suggested Citation

  • Mirko Draca & Jason Garred & Leanne Stickland & Nele Warrinnier, 2023. "On Target? Sanctions and the Economic Interests of Elite Policymakers in Iran," The Economic Journal, Royal Economic Society, vol. 133(649), pages 159-200.
    • Handle: RePEc:oup:econjl:v:133:y:2023:i:649:p:159-200.
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    References listed on IDEAS

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    Cited by:

    1. Jerg Gutmann & Matthias Neuenkirch & Florian Neumeier, 2024. "Political Economy of International Sanctions," Research Papers in Economics 2024-07, University of Trier, Department of Economics.
    2. Jerg Gutmann & Matthias Neuenkirch & Florian Neumeier, 2024. "Do China and Russia undermine Western sanctions? Evidence from DiD and event study estimation," Review of International Economics, Wiley Blackwell, vol. 32(1), pages 132-160, February.
    3. Gutmann, Jerg & Neuenkirch, Matthias & Neumeier, Florian, 2023. "The economic effects of international sanctions: An event study," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1214-1231.
    4. Aldunate, Felipe & Gonzalez, Felipe & Prem, Mounu, 2021. "Make the Economy Scream? U.S. Banks and Foreign Firms During the Cold War," SocArXiv bhwk7, Center for Open Science.
    5. repec:bge:wpaper:1516 is not listed on IDEAS
    6. Alessandro Casini & Adam McCloskey, 2025. "Identification, Estimation and Inference in High-Frequency Event Study Regressions," CEIS Research Paper 608, Tor Vergata University, CEIS, revised 28 Jul 2025.
    7. Konstantin Egorov & Vasily Korovkin & Alexey Makarin & Dzhamilya Nigmatulina, 2025. "Trade sanctions," Economics Working Papers 1920, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Dominic Rohner, 2025. "Conflict," CESifo Working Paper Series 12035, CESifo.
    9. Aytun, Uğur & Hinz, Julian & Özgüzel, Cem, 2025. "Shooting down trade: Firm-level effects of embargoes," Journal of Economic Behavior & Organization, Elsevier, vol. 231(C).
    10. Fengze Han & Runliang Li & Sen Ma & Tzu‐Chang Forrest Cheng, 2025. "Deterrent effects of targeted sanctions by mainland China on Taiwan: evidence from 2021–2 sanction events," Economica, London School of Economics and Political Science, vol. 92(365), pages 259-284, January.
    11. Aldunate, Felipe & González, Felipe & Prem, Mounu, 2024. "The limits of hegemony: U.S. banks and Chilean firms in the Cold War," Journal of Development Economics, Elsevier, vol. 166(C).
    12. de Souza, Gustavo & Hu, Naiyuan & Li, Haishi & Mei, Yuan, 2024. "(Trade) War and peace: How to impose international trade sanctions," Journal of Monetary Economics, Elsevier, vol. 146(C).
    13. repec:osf:socarx:z8f4h_v1 is not listed on IDEAS

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