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Innocent or not-so-innocent bystanders: evidence from the gravity model of international trade about the effects of UN sanctions on neighbor countries

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  • Slavi T. Slavov

    (Pomona College)

Abstract

This paper examines two theories about the effects of UN sanctions on trade flows between land neighbors of the target country and the rest of the world. First, there have been claims that sanctions hurt neighbor countries by cutting off trading routes, increasing transportation costs, and disrupting established trading ties. We would expect that a neighbor’s trade with the rest of the world would fall, as a result. Second, there is extensive evidence that neighbors have been heavily involved in smuggling. As a result, neighbors should trade more with the rest of the world during UN trade embargoes, because now they also trade on behalf of the target. I employ the gravity model of international trade to show that, overall, a neighbor’s trade with the rest of the world tends to fall during UN sanctions episodes. This confirms the first claim above: overall, land neighbors have been “innocent bystanders” hit by UN sanctions.

Suggested Citation

  • Slavi T. Slavov, 2005. "Innocent or not-so-innocent bystanders: evidence from the gravity model of international trade about the effects of UN sanctions on neighbor countries," International Trade 0501007, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0501007
    Note: Type of Document - pdf; pages: 18
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    References listed on IDEAS

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    1. Jeffrey A. Frankel, 1998. "Introduction to "Regionalization of the World Economy, The"," NBER Chapters,in: The Regionalization of the World Economy, pages 1-6 National Bureau of Economic Research, Inc.
    2. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72.
    3. Shang-Jin Wei & Jeffrey A. Frankel, 1998. "Open Regionalism in a World of Continental Trade Blocs," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 440-453, September.
    4. Soloaga, Isidro & Alan Wintersb, L., 2001. "Regionalism in the nineties: what effect on trade?," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 1-29, March.
    5. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
    6. Jeffrey A. Frankel, 1998. "The Regionalization of the World Economy," NBER Books, National Bureau of Economic Research, Inc, number fran98-1, June.
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    Cited by:

    1. Derek L. Braddon & Jonathan Bradley & Paul Dowdall, 2011. "The Economic Impact of the Conflict in the Balkans: The Case of Serbia," Chapters,in: Handbook on the Economics of Conflict, chapter 18 Edward Elgar Publishing.
    2. repec:oup:ecpoli:v:32:y:2017:i:90:p:263-318. is not listed on IDEAS
    3. Tibor Besedeš & Stefan Goldbach & Volker Nitsch, 2017. "You’re banned! The effect of sanctions on German cross-border financial flows," Economic Policy, CEPR;CES;MSH, vol. 32(90), pages 263-318.

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    JEL classification:

    • F1 - International Economics - - Trade

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