The effectiveness of embargoes: Evidence from Russia

Anna Miromanova

The World Economy, 2023, vol. 46, issue 4, 906-940

Abstract: While sanctions have been an increasingly popular instrument of Western foreign policy over the past several decades, retaliatory measures by non‐Western targets of Western sanctions are a more recent development. In this study, I focus on the first such incident in recent history: the Russian retaliatory embargo imposed in August 2014 in response to the anti‐Russian sanctions that have been in place since March 2014. I formulate a comprehensive approach to analysing the impacts of such retaliations on trade and how retaliating countries deal with lost trade. Towards that goal, I use a quadruple difference approach with high‐dimensional fixed effects to disentangle various effects of the retaliatory embargo on the extensive and intensive margins of trade. I find that such retaliation comes at a cost to both the retaliating country and the target of retaliation, while not being effective as Russian sanctions are still in place today. I estimate that the total loss of trade from such retaliation amounts to about 42 billion USD in the first 1.5 years after the imposition of the embargo. The disturbances caused by such retaliation destabilise bilateral trade by causing negative spillovers and significantly increase the costs of retaliation as an economic policy or political strategy. Note: This paper was written prior to the Russian invasion in Ukraine on 24 February 2022.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/twec.13344

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:46:y:2023:i:4:p:906-940

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().