by Nimra MALIK
Economic sanctions have become one of the most frequently deployed instruments of modern diplomacy. From Washington to Brussels, policymakers increasingly reach for sanctions to signal disapproval, deter aggression, and coerce adversaries without firing a shot. Today, more than a quarter of the world’s population lives in a country subject to some form of sanctions, a testament to their central role in international relations. Yet for all their ubiquity, sanctions remain controversial: hailed by some as a powerful alternative to war, condemned by others as blunt tools that deepen humanitarian suffering and accelerate global economic fragmentation.
Sanctions as Diplomacy by Other Means
Sanctions are not new. The United Nations Security Council has used them since the 1960s, and unilateral sanctions have long been part of U.S. statecraft. But their use has proliferated dramatically since the end of the Cold War. Scholars note that sanctions are now viewed as a ‘low-cost substitute for military intervention’ designed to apply economic pain in place of kinetic force. They range from comprehensive trade embargoes to targeted asset freezes, travel bans, and restrictions on specific industries.
Unlike earlier decades, contemporary sanctions are usually crafted to be ‘smart’ rather than ‘blanket,’ intended to target elites and strategic sectors while exempting humanitarian goods. This shift reflects painful lessons from the 1990s, when broad sanctions on Iraq produced devastating civilian suffering without achieving regime change.
When Sanctions Work and When They Don’t
The effectiveness of sanctions is a matter of enduring debate. Studies consistently show that while sanctions impose economic costs, they rarely achieve rapid political concessions. One review of decades of cases concludes that sanctions succeed under very specific conditions: when targets are
economically vulnerable, when sanctioning coalitions are broad, and when the objectives are limited and clearly defined.
Two recent cases Iran and Russia illustrate the complex dynamics at play.
U.S. Sanctions on Iran
For more than four decades, Iran has been the subject of layered U.S. sanctions aimed at curbing its nuclear ambitions and regional activities. These measures intensified in the 2010s, when restrictions on Iran’s banking sector and oil exports inflicted severe economic pain. Research shows Iran lost billions in oil revenue, endured high inflation, and saw its currency collapse. Yet politically, the regime remained resilient.
Sanctions did play a role in bringing Tehran to the negotiating table during the 2015 Joint Comprehensive Plan of Action (JCPOA). However, they did not end Iran’s nuclear program, and when the U.S. withdrew from the deal in 2018 and reimposed sanctions, Iran quickly resumed enrichment. Analysts argue that sanctions imposed ‘heavy financial and political costs’ but failed to convince Iranian leaders to alter their strategic calculus.
The Iranian case underscores a broader truth: sanctions can damage an economy, but transforming the political behavior of entrenched regimes is far more difficult.
Western Sanctions on Russia
Russia has faced sanctions since 2014, when it annexed Crimea, but the scope expanded dramatically after its full-scale invasion of Ukraine in 2022. The United States, European Union, and allies targeted Russian banks, froze central bank assets, banned exports of sensitive technologies, and imposed oil price caps.
The economic effects were immediate. Russia’s GDP contracted by 2.1 percent in 2022, foreign investment dried up, and its trade with the West collapsed. EU exports to Russia fell by nearly 60 percent, while imports from Russia plunged by more than 80 percent.
Russia sought to adapt by pivoting toward China, India, and other non-Western markets. However, these partnerships have only partially offset the deep economic losses caused by Western sanctions and have increased Moscow’s dependency on Beijing, reducing its long-term strategic autonomy. Trade with China alone surged to a record $245 billion in 2024, while India’s imports of discounted Russian oil soared fivefold. Economists note that ‘emerging economies have replaced most of Russia’s lost trade with advanced economies’.
Politically, sanctions did not compel the Kremlin to reverse course. Still, they remain a vital tool of international solidarity, clearly signaling that aggression against Ukraine carries lasting economic and diplomatic consequences. The Russia case demonstrates the limits of sanctions when applied against a large, resource-rich, and geopolitically resilient state.
The Broader Consequences
While sanctions often fall short of their political objectives, they have wide ranging economic and humanitarian consequences.
Global trade fragmentation. Sanctions have accelerated the formation of alternative economic blocs. Russia’s pivot to Asia, Iran’s barter trade with neighbours, and the rise of non-dollar payment mechanisms reflect a trend toward geoeconomic fragmentation. Yet this shift also highlights the effectiveness of sanctions in isolating Moscow from advanced economies, forcing it into less favorable and more dependent trade relations.
Humanitarian fallout. Even ‘targeted’ sanctions can exacerbate poverty and inequality. Studies show sanctions increase food insecurity, worsen health outcomes, and disproportionately affect women and children. In Iran, sanctions constrained access to medicines; in Venezuela, sanctions coincided with deteriorating public health. Policymakers increasingly face criticism that sanctions punish societies more than regimes.
Blowback on sanctioning states. Sanctions are not cost free for those who impose them. European industries lost access to Russian energy and markets, fuelling inflation and supply chain disruptions. American companies have forfeited opportunities in sanctioned states, while farmers in Europe faced retaliatory bans. As one study notes, ‘the costs of sanctions are mutual, borne by both the target and the sender’.
Risk of instability. Research indicates that sanctions can increase the likelihood of internal unrest or conflict, particularly in fragile states with weak institutions. Rather than fostering reform, sanctions may entrench authoritarian leaders and fuel societal grievances.
Rethinking Sanctions in Modern Diplomacy
None of this means sanctions should be abandoned altogether. They remain a vital diplomatic tool, especially as a signal of international resolve and solidarity. For smaller states or individuals who violate international law, targeted sanctions can be effective in curbing behaviour and freezing illicit assets.
But the evidence is clear: sanctions are not a silver bullet. Against large, resilient regimes like Iran or Russia, they inflict economic damage but rarely achieve sweeping political change. Worse, they risk producing unintended humanitarian crises and accelerating the fragmentation of the global order.
For sanctions to be effective, they must be strategically designed: limited in scope, multilateral in enforcement, and paired with credible diplomatic off ramps. Without clear objectives and viable exit strategies, sanctions risk becoming an end in themselves rather than a means to resolve conflict.
As great-power rivalry intensifies, sanctions will remain central to international diplomacy. But policymakers must recognize their limits. Sanctions can pressure and signal, but only diplomacy can ultimately deliver sustainable solutions. Yet in cases such as Russia’s aggression against Ukraine, sanctions remain indispensable, demonstrating that violations of international law carry lasting consequences and cannot go unanswered.
