IDEAS home Printed from https://ideas.repec.org/a/sae/compsc/v35y2018i5p474-502.html

The role and welfare rationale of secondary sanctions: A theory and a case study of the US sanctions targeting Iran

Author

Listed:
  • Baran Han

Abstract

This paper investigates the role and the welfare rationale of secondary sanctions using a game theoretic framework and a case study of the US sanctions targeting Iran. Existing literature on secondary sanctions focuses either on the sender–third party or the sender–target relations, and fails to address the interdependency of the three players’ strategies. An integrated approach allows us to examine the conditions under which the secondary sanction succeeds in coercing the third party to participate in a sanction campaign against a target. I argue that it acts as a commitment device for the third parties that value target compliance but find it too costly to voluntarily participate in the sanctions when the target complies at a suboptimal level. Despite the coercive nature, secondary sanction can be welfare improving for them. The framework provides an explanation of the successful outcome of the recent US secondary sanctions targeting Iran.

Suggested Citation

  • Baran Han, 2018. "The role and welfare rationale of secondary sanctions: A theory and a case study of the US sanctions targeting Iran," Conflict Management and Peace Science, Peace Science Society (International), vol. 35(5), pages 474-502, September.
    • Handle: RePEc:sae:compsc:v:35:y:2018:i:5:p:474-502
    DOI: 10.1177/0738894216650836
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0738894216650836
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0738894216650836?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Langlois Catherine C & Langlois Jean-Pierre P., 2010. "Costly Interference: A Game Theoretic Analysis of Sanctions," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(1), pages 1-34, June.
    2. Drezner, Daniel W., 2000. "Bargaining, Enforcement, and Multilateral Sanctions: When Is Cooperation Counterproductive?," International Organization, Cambridge University Press, vol. 54(1), pages 73-102, January.
    3. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-282, July.
    4. Naqvi, Nadeem & Wemhoner, Frederick, 1995. "Power, coercion, and the games landlords play," Journal of Development Economics, Elsevier, vol. 47(2), pages 191-205, August.
    5. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2007. "Economic Sanctions Reconsidered, 3rd edition (hardcover)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4075, January.
    6. Gary Clyde Hufbauer & Kimberly Ann Elliott & Tess Cyrus & Elizabeth Winston, 1997. "US Economic Sanctions: Their Impact on Trade, Jobs, and Wages," Working Paper Series Working Paper Special (2), Peterson Institute for International Economics.
    7. Maxim Engers & Jonathan Eaton, 1999. "Sanctions: Some Simple Analytics," American Economic Review, American Economic Association, vol. 89(2), pages 409-414, May.
    8. Hatlebakk, Magnus, 2002. "A new and robust subgame perfect equilibrium in a model of triadic power relations," Journal of Development Economics, Elsevier, vol. 68(1), pages 225-232, June.
    9. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
    10. Jiawen Yang & Hossein Askari & John Forrer & Lili Zhu, 2009. "How Do US Economic Sanctions Affect EU's Trade with Target Countries?," The World Economy, Wiley Blackwell, vol. 32(8), pages 1223-1244, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Devasmita Jena & C. Akash & Prachi Gupta, 2024. "Deflecting economic sanctions: do trade and political alliances matter?," International Economics and Economic Policy, Springer, vol. 21(3), pages 543-567, July.
    2. Hatlebakk, Magnus, 2002. "Triadic Power Relations with Production, External Markets and Multiple Agents," Working Papers 02-18, Cornell University, Center for Analytic Economics.
    3. von Soest, Christian & Wahman, Michael, 2013. "Sanctions and Democratization in the Post-Cold War Era," GIGA Working Papers 212, GIGA German Institute of Global and Area Studies.
    4. Kaushik Basu, 2016. "Beyond the Invisible Hand: Groundwork for a New Economics," Economics Books, Princeton University Press, edition 1, number 9299, December.
    5. Vigninou Gammadigbe, 2025. "Back to Sender: Sanctions’ Effects on Bilateral Trade with Third-party Countries," Working Papers 202508, Center for Global Policy Analysis, LeBow College of Business, Drexel University.
    6. Shami, Mahvish, 2012. "The Impact of Connectivity on Market Interlinkages: Evidence from Rural Punjab," World Development, Elsevier, vol. 40(5), pages 999-1012.
    7. Petrevski, Goran, 2025. "Economic sanctions and output growth: Empirical evidence," EconStor Preprints 325283, ZBW - Leibniz Information Centre for Economics.
    8. Dizaji, S.F. & Lis, P. & Murshed, S.M. & Zweiri, M., 2020. "What the political economy literature tells us about blockades and sanctions," ISS Working Papers - General Series 130655, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    9. Ioana M. PETRESCU, 2016. "The Effects of Economic Sanctions on the Informal Economy," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 4(4), pages 623-648, December.
    10. Omar, Ayman & Lambe, Brendan John, 2022. "Crude oil pricing and statecraft: Surprising lessons from US economic sanctions," International Review of Financial Analysis, Elsevier, vol. 83(C).
    11. Hatlebakk, Magnus, 2002. "A new and robust subgame perfect equilibrium in a model of triadic power relations," Journal of Development Economics, Elsevier, vol. 68(1), pages 225-232, June.
    12. Felbermayr, Gabriel & Kirilakha, Aleksandra & Syropoulos, Constantinos & Yalcin, Erdal & Yotov, Yoto V., 2020. "The global sanctions data base," European Economic Review, Elsevier, vol. 129(C).
    13. Moteng, Ghislain & Raghutla, Chandrashekar & Njangang, Henri & Nembot, Luc Ndeffo, 2023. "International sanctions and energy poverty in target developing countries," Energy Policy, Elsevier, vol. 179(C).
    14. Oechslin, Manuel, 2014. "Targeting autocrats: Economic sanctions and regime change," European Journal of Political Economy, Elsevier, vol. 36(C), pages 24-40.
    15. Gabriel Felbermayr & Constantinos Syropoulos & Erdal Yalcin & Yoto V. Yotov, 2025. "On the heterogeneous effects of sanctions on trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 58(1), pages 247-280, February.
    16. David Lektzian & Glen Biglaiser, 2014. "The effect of foreign direct investment on the use and success of US sanctions," Conflict Management and Peace Science, Peace Science Society (International), vol. 31(1), pages 70-93, February.
    17. Caruso Raul, 2003. "The Impact of International Economic Sanctions on Trade: An Empirical Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 9(2), pages 1-36, April.
    18. Denise Guthrie & Erick Duchesne, 2003. "(Mis)Selection Effects and Sovereignty Costs: An Alternative Measure of the Costs of Sanctions," University of Western Ontario, Economic Policy Research Institute Working Papers 20032, University of Western Ontario, Economic Policy Research Institute.
    19. 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.
    20. Brzoska Michael, 2008. "Measuring the Effectiveness of Arms Embargoes," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 14(2), pages 1-34, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:compsc:v:35:y:2018:i:5:p:474-502. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.