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Always Affecting the Wrong People? The Impact of US Sanctions on Poverty

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  • Matthias Neuenkirch
  • Florian Neumeier

Abstract

In this paper, we analyze the effect of US economic sanctions on the target countries’ poverty gap during the period 1978–2011. Econometrically, we employ a nearest neighbor 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 indeed affecting the wrong people as we observe a 2.3–5.1 percentage points (pp) larger poverty gap in sanctioned countries compared to their nearest neighbors. Severe sanctions, such as fuel embargoes, trade restrictions, the freezing of assets, or embargoes on most or all economic activity are particularly detrimental and lead to an increase in the poverty gap by 6.1–7.4 pp.

Suggested Citation

  • Matthias Neuenkirch & Florian Neumeier, 2015. "Always Affecting the Wrong People? The Impact of US Sanctions on Poverty," Research Papers in Economics 2015-03, University of Trier, Department of Economics.
    • Handle: RePEc:trr:wpaper:201503
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    References listed on IDEAS

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    1. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
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    4. Matthias Neuenkirch & Florian Neumeier, 2015. "The Impact of UN and US Economic Sanctions on GDP Growth," FIW Working Paper series 138, FIW.
    5. Neuenkirch, Matthias & Neumeier, Florian, 2015. "The impact of UN and US economic sanctions on GDP growth," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 110-125.
    6. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2009. "Economic Sanctions Reconsidered, 3rd Edition (paper)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4129, March.
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    9. Dursun Peksen & A. Cooper Drury, 2010. "Coercive or Corrosive: The Negative Impact of Economic Sanctions on Democracy," International Interactions, Taylor & Francis Journals, vol. 36(3), pages 240-264, August.
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    Cited by:

    1. 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.
    2. Morteza Ghomi, 2022. "Who is afraid of sanctions? The macroeconomic and distributional effects of the sanctions against Iran," Economics and Politics, Wiley Blackwell, vol. 34(3), pages 395-428, July.

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    More about this item

    Keywords

    Economic Sanctions; Nearest Neighbor Matching; Poverty; United States;
    All these keywords.

    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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