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Sanctions and Public Opinion: The Case of the Russia-Ukraine Gas Disputes

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Abstract

Economic sanctions usually fail, sometimes even provoking the opposite of the intended outcome. Why are sanctions so often ineffective? One prominent view is that sanctions generate popular support for the targeted government and its policies; an outcome referred to as the rally-around-the-flag effect. We quantify this effect in the context of a major trade dispute between Ukraine and the Russian Federation, which led to a cut in gas exports to Ukraine and a sharp increase of gas prices. Using individual data on political and economic preferences before and after the trade dispute and exploiting the cross section heterogeneity in the individual exposure to the price shock—measured by the connection to a centralized gas/heating system—we find that people more directly affected by the increase of gas prices were significantly more likely to change their opinions in support of Western-style political and economic systems preferred by the incumbent government, consistent with a rally-around-the-flag effect.

Suggested Citation

  • William Seitz & Alberto Zazzaro, 2019. "Sanctions and Public Opinion: The Case of the Russia-Ukraine Gas Disputes," CSEF Working Papers 529, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:529
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    File URL: http://www.csef.it/WP/wp529.pdf
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    Keywords

    Sanctions; Gas Dispute; Russia; Ukraine; Rally-Around-the-Flag;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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