Asking the Wrong Questions About Sanctioning Russia

Will Russia acquiesce in Ukraine because of economic sanctions? Are you nuts?!

By Daniel Drezner, Professor of International Politics at The Fletcher School of Law and Diplomacy at Tufts University

Over the weekend, commemorating the second anniversary of the Russo-Ukrainian War, Politico dropped an analysis of Russia’s perseverance in the face of economic sanctions.1 The entire premise of the piece revolved around asking one question:

Russia has faced a historic slew of penalties from Washington, Brussels and beyond since it launched its full-scale invasion of Ukraine on Feb. 24, 2022. The punishments, chiefly economic sanctions, were designed in large part to drain Russia’s coffers so it would struggle to fund its war. And more pain has been promised as both the U.S. and EU unveiled new sanctions against Russia this week, some tied to the death of imprisoned opposition leader Alexei Navalny.

Yet, two years on, Russia’s economy has rebounded. Its factories are humming, its oil and gas sales are relatively strong and its people are at work in a system retrofitted to be all about the war. Vladimir Putin, meanwhile, appears firmly in charge of the Kremlin, despite hopes that Russia’s elite would turn on him as the economic pressure grew.

Why haven’t the international penalties knocked Russia out of Ukraine? The answer often comes down to two factors: political will and technical ability (emphasis added).

The rest of the article is an excellent analysis of the challenges involved with trying to sanction a large economy like the Russian Federation. I just wrapped up writing a book chapter on the use of sanctions in the Russo-Ukrainian War, and I hope I can cite this piece (and some of its embedded links) in a revision. 

But the bolded question kept making me thing of a running theme from the HBO anthology series True Detective:

Or, to paraphrase Liz Danvers from True Detective: Night Country, Politico is asking the wrong question. The query, “why haven’t sanctions knocked Russia out of Ukraine?” presupposes that economic sanctions, by themselves, could force a nuclear-armed state to relinquish territory conquered on the battlefield. And that dog won’t hunt. 

As I wrote in this snippet from my forthcoming chapter:

Any ex ante scholarly evaluation of the ability of sanctions to affect the Russo-Ukrainian war would be pessimistic.  Territorial concessions are the biggest ask in international relations; sanctions are always unlikely to work in this context….  

There are ongoing disputes within the sanctions literature about their relative efficacy as an instrument of statecraft.  However, there is consensus that – all else equal – sanctioning great powers is less likely to work.  Great power targets are most likely to possess the strategic reserves and capacities necessary to withstand sustained economic pressure.  Furthermore, almost by definition great powers will anticipate frequent conflicts with sanctioning great powers.  Expectations of future conflict reduce the probability of successful coercive bargaining even further.  Finally, sanctions are particularly unlikely to cause targeted great powers to relinquish territory won through the expenditure of blood and treasure.  In the history of economic statecraft, the number of instances in which a state – much less a great power – agreed to concede territory in response to economic sanctions is vanishingly small.  The likelier outcome in response to maximum economic pressure is either military escalation by the target (as with Japan in 1941) or the sender (as with the United States in Iraq and the Balkans in the 1990s).  It is therefore unsurprising that sanctions failed as a tool of deterrence and compellence in the Russo-Ukrainian War.

Increasingly, Western countries view sanctions as a tool of denial – i.e., weakening the aggregate power of the targeted actors.  The Russo-Ukrainian case highlights multiple policy challenges for using sanctions for a form of great power denial.  Such a strategy creates different dynamics than when sanctions are employed as a tool of deterrence or compellence.  For a denial strategy to work, multilateral cooperation is essential to ensure that the target cannot find alternatives for sanctioned goods.  That, in turn, requires an institutional machinery in order to make cooperation sustainable and enforceable over the long run.  The private sector needs to have the necessary compliance mechanisms to enforce the sanctions.  And the sanctions have to be incentive compatible – i.e., the senders do not incur long-term economic costs in the process of sanctioning. 

Most of these conditions have not existed in the sanctions involving Russia and Ukraine…. The United States has faced difficulties meeting these criteria.  Multilateral cooperation has been robust within the West – but it has been neither global in scope nor institutionalized to any degree.  The private sector has been behind the curve in implementation and enforcement.  And the nature of Russian-European trade mitigates against total embargoes. 

As it turns out, the Politico story contains some quotes that highlight these exact points. Treasury Deputy Secretary Wally Adeyemo says explicitly, “Sanctions alone are not enough to carry Ukraine to victory.” Similarly, the Atlantic Council’s Kim Donovan said, “Sanctions and other economic measures alone are not going to win this war. We need to manage our expectations of what these tools can accomplish in the short term.”

The better question to ask is, “What should be expected from sanctioning Russia at this juncture?” And there are a few not-mutually-exclusive answers to this question:

  1. Norm enforcement — i.e., ensuring that countries attempting territorial annexation through the use of force pay a price;
  2. Degrading Russia’s ability to prosecute its war in Ukraine;
  3. Degrading Russia’s ability to engage in revisionist actions elsewhere. 

The consensus seems to be that if the Russian economy fails to implode, then the sanctions have failed. But that is the wrong way to think about it. All sanctioned countries can draw down resources in the short term to persevere. As Alexandra Prokopenko pointed out last month in Foreign Affairs, the ongoing sanctions mean that Russia is paying a significant price in waging its war of choice:

Rather than signaling economic health… these figures are symptomatic of overheating. The Russian economy’s problems, in fact, are such that Putin is facing an impossible trilemma. His challenges are threefold: he must fund his ongoing war against Ukraine, maintain his populace’s living standards, and safeguard macroeconomic stability. Achieving the first and second goals will require higher spending, which will fuel inflation and thus prevent the achievement of the third goal. High oil and gas revenues, adept financial management by the Russian authorities, and lax enforcement of Western restrictions have all played their part in Russia’s economic growth, but they mask growing imbalances in the economy….

Even if Moscow’s financial leadership succeeds in cooling down the economy by the end of 2024, major problems caused by the war are inevitable. These include discontent over underfinanced public health, mounting shortages of tools and equipment due to the tightening sanctions regime, and major dislocations caused by mammoth investment in the defense industry. Future generations will pay a heavy price for the current state of affairs, although for now this is the last thing on the Kremlin’s mind. 

I have written a fair amount in recent years about how the United States sanctions way too much and way too badly. And the sanctions against Russia can be improved. But given Russia’s behavior and U.S. strategic interests, the current sanctions are still the right call. It’s just that there should be some policymaker humility about them. Simply ratcheting up economic pressure won’t work either, because secondary sanctions creates considerable collateral damage. 

Furthermore, even the best version of economic sanctions are not the most important way the United States can aid Ukraine. To its credit, the Economist gets at this point in their leader from this past week: 

For policymakers in Washington and Brussels, sanctions hold a seductive appeal. At a time when political support for funding the war is fraying, they seem like a cheap way to weaken Russia and defend Ukraine. Yet the past two years reveal just how wishful such thinking is. Sanctions are not doing enough, and beefing them up will be counterproductive in the long term. There is no magic weapon; financial warfare is not a substitute for sending Ukraine the money and arms it needs.

Do not ask if economic sanctions will force Russia out of Ukraine. Instead, ask what the United States can do in addition to sanctions to aid Ukraine. Then ask if U.S. strategic interests would be served by lifting sanctions against Russia. 

1 Even though, as Rajan Menon pointed out, Russia has already suffered a strategic defeat in Ukraine.

(This post is republished from Drezner’s World.)

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