Economic Sanctions on Authoritarian States: Lessons Learned

In the post-Cold War world, multilateral economic sanctions — so-called wars without bullets — have become a popular policy tool. The United Nations has resorted to sanctions six times more often during the 1990s than in the prior 45 years.¹ Sanctions have become an alternative or a complement to military action to induce change in a country's behavior.² The fundamental reason for the popularity of sanctions is the gap between words and military action. As Sir Jeremy Greenstock, Britain's former ambassador to the United Nations, aptly said, "In a modern legitimacy-oriented world, military action is increasingly unpopular and in many ways ineffective, and words don't work with hard regimes. So something in between these is necessary. What else is there?"³ Sanctions also satisfy a need to "do something." The international community "cannot undertake an unlimited number of military endeavors simultaneously."⁴

But do sanctions work? The scholarship on this tool of statecraft is generally skeptical, portraying the use of economic sanctions as ineffective or even counterproductive. Despite their frequent use and increasing popularity, scholars concur that "little agreement exists on even the most basic questions surrounding the use of these tools."⁵ These shortcomings were stressed by the American scholar Daniel Drezner in a 2011 article tracing the evolution of the sanctions debate. He argued that the sanctions literature needs to pay greater attention to the "inner workings"⁶ and political economy of authoritarian countries that have increasingly invalidated Western-based assumptions about how a rational actor should respond to sanctions.

This paper attempts to untangle the puzzle of why economic sanctions imposed on authoritarian regimes usually fail to bring about political change. How do leaders of targeted authoritarian states manage to stay in power and resist a policy change despite sanctions? And why does the economic deprivation caused by sanctions not lead to the popular mobilization that would be necessary to force authoritarian leaders to yield to sender states' demands? I explore how economic sanctions affected the political economy and the state-society relationship in Iraq between 1990 and 2003. For comparative leverage, I also briefly examine the case of Libya under sanctions in the 1990s.

These two cases were chosen due to their relative similarity to Iran today. Of course, the political economy of each is clearly different, but the Iraqi and Libyan cases share several characteristics with the Iranian case. All have at some point been under sanctions because of their support for terrorism, development of weapons of mass destruction, and abuse of human rights. They have been hostile to the West, are part of the same region, have been considered authoritarian, and have economies that are heavily dependent on the export of oil. These two cases were selected also because they constitute stark opposites. In Iraq, one of the most comprehensive and controversial sanctions regimes ever imposed led to a relative failure. In Libya, limited, so-called targeted, sanctions were considered a relative success. This paper uses Hufbauer's definition of sanctions: "The deliberate, government-inspired withdrawal, or threat of withdrawal, of customary trade and/or financial relations."⁷

THE SANCTIONS DEBATE

Despite much scholarship on the subject, the literature on economic sanctions remains "among the most contentious and inconclusive in international relations,"⁸ demonstrating that sanctions are a poorly understood foreign-policy instrument. Skepticism about sanctions abounds. Richard Stuart Olson contends, "It is worth noting at the outset that there is a consensus in [the] literature that economic sanctions are largely ineffective."⁹ According to Robert Gilpin, "With very few exceptions and under highly unusual sets of circumstances, economic sanctions have historically proven to be an ineffective means to achieve foreign-policy objectives."¹⁰ Robert Pape adds, "The evidence shows that sanctions are not likely to achieve major foreign-policy goals."¹¹

This reflects what David Baldwin calls the sanctions paradox: policy makers continue to employ economic sanctions despite the evidence that they do not work — simply because military force poses too high a cost.¹² The seminal study by Hufbauer et al. concluded that sanctions worked 34 percent of the time, with the qualification that, in terms of high policy goals, the effectiveness of sanctions amounted to only19 percent.¹³ However, Pape re-examined their dataset and found that the success rate was only around 5 percent.¹⁴ He challenged this widely cited study, claiming that "nearly all of the alleged sanctions successes can be attributed to factors other than economic coercion."¹⁵

Other authors question these results altogether, arguing that the pessimistic results delivered by the academic community regarding economic coercion are biased by the empirical data from the bipolar period of the Cold War, during which the effective employment of economic sanctions was rather difficult.¹⁶ In contrast, Drezner argues that sanctions may be more successful than the scholarly literature suggests because the most successful sanctions are those that were never actually imposed.¹⁷ Drezner argues that sanctions "work better at the threat stage than at the imposition stage."¹⁸ The mere threat of sanctions may persuade a potential victim to change a policy under negotiation. These economic threats are, however, often made behind closed doors; their success is therefore not discernible by scholars.

There is also disagreement over how to measure the individual role of sanctions when used with other instruments. According to Hufbauer et al., sanctions can be considered successful even if the policy objective was ultimately achieved through the use of military force.¹⁹ Pape challenges this methodology, arguing that only when sanctions achieve an objective without resorting to military force can they be credited with success.²⁰ Another factor concerns sanctions' effect respective to lives lost.²¹ Moreover, there is no control group to show what would have happened in the absence of sanctions.²² In addition, it is difficult to discern to what extent sanctions caused damage and to what extent it was caused by the regime itself.²³

In less than a decade, the scholarship on sanctions has progressed from treating states under sanctions as unitary rational actors, moving from "Do sanctions work?" to "Under what conditions are sanctions successful?"²⁴ Scholars have concluded that sanctions are more likely to induce concessions when the disputed issue is of low salience to the target country,²⁵ when sanctions are multilateral²⁶ and comprehensive,²⁷ and when the target state is a democracy.²⁸ This evolution was triggered by the Iraqi case, where the longest and most comprehensive sanctions regime in history failed to yield concessions, calling the entire sanctions enterprise into doubt.

When the sanctions against Iraq were initially imposed, most policy makers believed that Saddam Hussein would be the victim of a coup in short order. Conventional wisdom suggests that economic hardship resulting from sanctions will lead to an anti-government uprising by the targeted public, who will pressure their leader to yield to the demands of the sender states.²⁹ These assumptions stem from the "deprivation perspective," which suggests that the response of targeted populations will be consistent regardless of the political context.³⁰ According to Losman, "For sanctions to be successful, the economic pressure must be sufficient to unleash domestic political pressure that will either topple an intransigent regime or bring about the adoption of new policies more in accord with the norms of the boycotting nation."³¹

Despite the fact that this expectation often fails to materialize, Allen suggests that "this view of sanctions has influenced American foreign policy toward a variety of countries, but there is very little empirical evidence as to whether this is what actually occurs on the ground in states targeted by sanctions."³² In other words, considering the frequency with which economic sanctions are used, very little is understood about how exactly they bring about the political change they are meant to create.³³ As the case of Iraq most vividly illustrated, leaders in authoritarian countries may be able to shift the cost of sanctions to the population. Some scholars argue that "regardless of the amount of the economic pressure exerted, without political costs to the leadership, there is no reason for targeted states to comply."³⁴

O'Sullivan also makes a critical distinction: the impact and the effectiveness of sanctions are "by no means synonymous."³⁵ The assumption that the economic damage caused by sanctions will "somehow seamlessly translate into political change" is far from obvious.³⁶ It is believed to have developed from the logic underlying the strategy of punitive air strikes.³⁷ When either air power or economic sanctions are used, the sender state attempts to impose costs on civilians, with the expectation that these societal costs would create "mass-elite divisions in society, and a swift social breakdown could be achieved if elites could be detached from the masses."³⁸

As Drezner points out, the relative failure of this logic to materialize has led to a shift in emphasis in sanctions research toward the exploration of mechanisms within the black box of the target state. Particular attention is now being paid to the political economy of authoritarian countries, on which 78 percent³⁹ of sanctions have been imposed over the past three decades.⁴⁰ Moreover, the collateral disaster in Iraq did not lead to destabilization of Saddam's regime or weaken his grip on power, leading policy makers to question the effectiveness of comprehensive sanctions on authoritarian targets.⁴¹ This has led to a shift of attention toward targeted, so-called "smart" sanctions: financial measures, asset freezes, travel bans and arms embargoes, among others.

By 2010, both the United Nations and the United States had "internalized the idea of targeted sanctions"; the United Nations had not imposed comprehensive sanctions for the previous 16 years.⁴² The logic behind smart sanctions suggests that like "precision-guided munitions," sanctions that target a regime's elites would minimize the collateral damage suffered by the majority while increasing the costs for the regime.⁴³ With the United States being the epicenter of global finance, denying critical access to U.S. capital markets and banking services has been seen as a particularly potent tool.

Despite the frequent use of these targeted sanctions in the last two decades, many scholars argue that "comprehensive sanctions are more effective than targeted or selective measures. Where economic and social impact has been greatest, political effects have also been most significant."⁴⁴ Similarly, Elliott contends that "with the exception of Libya, the results of UN targeted sanctions have been disappointing."⁴⁵ As Drezner aptly puts it:

They [targeted sanctions] do, however, appear to solve several political problems for sender countries. Because they are billed as minimizing humanitarian and human-rights concerns, they receive only muted criticism from global civil society. Because they do not impede significant trade flows, smart sanctions can be imposed indefinitely with minimal cost. They clearly solve the political problem of "doing something'' in the face of target-state transgressions. They do not solve the policy problem of coercing the target state into changing its policies.⁴⁶

IRAQ

Iraq's invasion of Kuwait in 1990 set off a 13-year period of sanctions, ending with the U.S.-led invasion in 2003. Starting with UN Security Council (UNSC) resolution 661, aimed at achieving Iraq's withdrawal from Kuwait, the subsequent UNSC resolutions 687 and 688, passed in 1991, defined demands for a decade to come.⁴⁷ The case of Iraq illustrates that sanctions do not necessarily translate into the desired effect in authoritarian states; there is no "easily discernible transmission mechanism that causes social suffering to be translated into political change."⁴⁸

This inability of comprehensive sanctions to extract concessions led many to call into question their credibility as a tool of foreign policy. Moreover, the case of Iraq illustrates that the unresolved debate about whether and when sanctions "work" is also contentious in regard to individual cases. This is partly because of the varying criteria against which success has been judged. Definition of success often determines sanctions' effectiveness. For those who set the standard of success at regime change,⁴⁹ sanctions have obviously failed. For others, the absence of weapons of mass destruction (WMD) revealed after the U.S.-led intervention in 2003 was viewed as evidence that the sanctions program was a success.⁵⁰

For those concerned with the overall utility of sanctions, defined by O'Sullivan as "the extent to which sanctions achieve their goals, minus the costs incurred in the process,"⁵¹ the answer is subjective. For Madeleine Albright, despite the humanitarian disaster, "the price is worth it";⁵² for some, "quick military action may have yielded greater benefits at lower costs."⁵³ Others conclude that the price was too high: economic sanctions may well have been "a necessary cause of the deaths of more people in Iraq than have been slain by all so-called weapons of mass destruction throughout history."⁵⁴

This paper joins the camp of those who wonder why the so-called deprivation theory, which reflects the underlying logic behind the sanctions, as defined by the Western concept of rationality, did not materialize. Why did the Iraqi people not rise up against Hussein's regime, considering the level of deprivation they faced?  How had Hussein, and other leaders for that matter, been able to survive such lengthy international sanctions and comprehensive trade embargos?

When sanctions were initially imposed, most policy makers believed that Hussein would be the victim of a coup in short order, since the comprehensive trade embargo had a dramatic economic impact.⁵⁵ The devastation of the infrastructure that ensued from the first Gulf war and then the almost total cut-off of exports and imports meant that Iraq was, in the words of a UN envoy "reduced to a pre-industrial state and then was kept, more or less, close to that condition for over a decade after."⁵⁶ Measured in terms of cost, these sanctions were, by far, the most comprehensive in history.⁵⁷ Never before has a country faced such prolonged economic suffocation: the value of lost revenues from banned oil exports amounted to more than $130 billion; GDP dropped by 50 percent; inflation rose by more than 5,000 percent; per capita income plummeted to levels of the poorest nations.⁵⁸ It was estimated that Iraq lost between $175 billion and $250 billion in potential oil revenues.⁵⁹ Moreover, the price of a family's food supply for a month increased 250-fold over the first five years of the sanctions regime, which also caused up to 227,000 deaths among children.⁶⁰

This devastation had the perverse effect of strengthening Hussein's power, rather than mobilizing the population against the regime, and led to the fundamental transformation of the state-society relationship. The economic deprivation caused by sanctions led to the increased dependence of the population on the government for basic foods and other items needed for survival. The Iraqi people found themselves at the mercy of the government-run rationing system, viewed as "completely essential to the survival of the Iraqi population," even saving many Iraqis from starvation.⁶¹ It was estimated that 60 percent of Iraq's families relied solely on the food rations to meet their household needs.⁶²

The Iraqi Ministry of Trade distributed foodstuffs monthly to every Iraqi who presented a ration card with proper identification. Rations covered a caloric value of 1,300 kilocalories per person per day; even after the initiation of the Oil-for-Food Program, it did not exceeded 1,993 kilocalories, despite the fact that intake averaged 3,120 kilocalories per day.⁶³ As one scholar suggests, "Control over food confers ultimate power; prevent people from eating for a few weeks and they will not cause you much trouble thereafter."⁶⁴ Another points out that "the risk of having rations withdrawn was too high for dissent."⁶⁵ The dependence was caused by rampant inflation, with the purchasing power of the Iraqi dinar (ID) falling from a value of four to a dollar in early 1990 to 1,850 to a dollar in early 2000.⁶⁶ Unemployment surged; public-sector employees, comprising about 40 percent of the work force, found themselves impoverished, making on average ID12,000 ($8) to 80,000 ($53) per month. The pensions and income of those at the margin dropped to ID 550, while the monthly cost of maintaining a family of four was estimated at around ID 250,000.⁶⁷

With the initiation of the UN Oil-for-Food Program in 1996, rations were increased, but distribution remained in the hands of the government. The fact that this program did not lead to change on the ground was expressed by Denis Halliday, UN humanitarian coordinator in Iraq 1997-98: "The sanctions regime ... is paramount in everybody's life and mind every hour of the day. It never goes away. The impact is constant."⁶⁸ Furthermore, the population's knowledge that the government could withhold ration cards was sufficient to discourage any action that might jeopardize access to rations. According to an Iraqi student:

First we got used to the idea that the government provided food, then we started to see the government as the provider of absolutely everything. For Saddam, it was great. The more he controlled distribution, the more effective the Iraqi police state became. After all, practically the worst thing you could do was to lose your ration card.⁶⁹

Moreover, the fact that the rationing system was initiated as a response to adverse consequences, imposed not by the government but by outsiders, played directly into Saddam's anti-Western propaganda while portraying him as the savior of the starving. As a former U.S. Army officer expressed, "[Hussein] made sure the Ministry of Trade organized things correctly. As a result, the rationing was popular. It helped the regime maintain its legitimacy. Most people thought, Saddam is feeding us while the Americans are trying to starve us to death."⁷⁰ Furthermore, the fact that the Internet and e-mail were totally unavailable, satellites were banned by the government, and virtually no foreign publications reached Iraq⁷¹ helped Hussein to maintain his propaganda, while making it difficult for people to organize.

High-level popular revolt was therefore prevented; people were focused on daily survival. Moreover, as Allen has argued, when governments are threatened externally, as they are by sanctions, most are likely to increase internal repression. In sanctioned autocracies, "The costs were already prohibitively high [before sanctions]," and this shift towards further tightening "[made] the likelihood of an increase in antigovernment activity in those states improbable."⁷² This was exacerbated by a widespread belief that a change in regime under such conditions would lead to bloody conflict.⁷³

These deplorable conditions also transformed the fabric of the society, leading to the emergence of rampant corruption and bribery and a deep social division between the commercial elite close to the government and the rest.⁷⁴ Sanctions also created "a nouveau riche class of black-marketeers" beholden to the regime and enriched a small group of politically protected "businessmen," while impoverishing and marginalizing the traditional middle class.⁷⁵ Moreover, people became concentrated on the struggle and survival of their closest family members, with "rivalry and competition expected from [the] wider society, creating a drive toward social disintegration."⁷⁶

TRANSFORMATION OF THE ECONOMY

Saddam's ability to prevent core groups from weakening also enabled the regime's survival. The creation of an illicit parallel economy made this possible. Before the inception of the oil-for-food program in 1996, Iraq was virtually isolated from the outside world, with the government and Iraqi people gradually developing ways to adapt to the adverse conditions and circumvent the sanctions. According to Nimah Mazaheri, "The sanctions program's lengthy time span did allow smugglers and middlemen to begin to play a valuable role in providing those goods that sanctions typically seek to target," leading to the emergence of a well-developed underground market and illicit economy.⁷⁷

As Peter Andreas argues, sanctions encourage the creation of organized crime and transnational smuggling networks across different groups outside and inside the targeted country.⁷⁸ Moreover, these underground trade linkages tend to greatly expand over time. In October 2004, a report by the lead U.S. arms inspector confirmed this hypothesis, revealing that the Iraqi regime had created an extensive international bribery and smuggling network. Despite UN efforts to monitor Iraq's borders, one report claimed that "for every truck crossing the Turkish-Iraqi border that is checked by UN oil-for-food monitors, 200 pass by unchecked," and that "the same is true at other points of entry into Iraq such as Syria, Jordan and Iran."⁷⁹

The inflow of money despite the comprehensive trade embargo was made possible by creation of this extensive and "ever growing" smuggling network. In violation of sanctions, the regime generated money by illicitly selling oil to neighboring countries from 1990 to 2003 and by manipulation of the oil-for-food program, imposing on buyers a 25-30 percent surcharge for each approved barrel of oil, as well as by soliciting kickbacks from companies providing humanitarian and other civilian goods.⁸⁰ According to the Duelfer report, Iraq illicitly earned $10.9 billion during 1990-2003, including $228 million earned from surcharges on approved oil sales, $1.5 billion from kickbacks on humanitarian supply contracts, and $1.2 billion from trade with private businessmen.⁸¹

In this well-orchestrated illicit system, Saddam, his regime's elite and businessmen — particularly from the Arab countries, France and Russia — were able to generate high profits.⁸² Iraqi oil was smuggled to Jordan, Syria, Turkey and even Iran. One estimate shows that the amount of oil smuggled each day increased from 50,000 barrels in 1998 to around 600,000 by the end of the decade, with the regime earning $2-3 billion a year from the smuggling.⁸³ Moreover, Saddam deliberately awarded contracts for oil and civilian goods under the oil-for-food program to countries sitting on the UN Security Council, including Russia, China and France, with these contracts to be realized only if sanctions were lifted.

By smuggling oil, selling gold reserves and printing money to buy foreign exchange on the black market, Saddam was able to accumulate the means to protect and placate his inner circle, including military leaders and supporters.⁸⁴ However, printing money led to rampant inflation — 65,000 percent — which led to a catastrophic economic crisis by late 1995, seriously endangering his ability to maintain food rations for the public and money for his inner circle. This led him to accept the initially refused oil-for-food program, which initiated a new phase for the remainder of the sanctions regime.⁸⁵ The oil-for-food program "quickly evolved into an open bazaar of payoffs, favoritism and kickbacks."⁸⁶ Moreover, with the oil industry partially revived, Iraq was producing crude at its 1989 level and making more profit from exports than before the first Gulf war.⁸⁷ With the program leading to an increase in food rations and thereby fending off unrest, Saddam concentrated on consolidating his power by supplying enough money and luxury goods to keep the military and security apparatus content.

The centralized nature of the system and the control of access to illicit trade by Saddam, his sons and his close inner circle also led to a redistributional effect, creating new classes of winners and losers. Since the market under sanctions became highly regulated by the regime, only Saddam and the inner core were in a position to make traders rich by circumventing sanctions or using them "in ways their architects had never intended."⁸⁸ Though the regime was not able to control the entire market, they were still able to limit those who grew too powerful and posed a threat. This was demonstrated in 1992, when Saddam hanged 42 merchants accused of profiteering.⁸⁹

LIBYA

The case of Libya is often portrayed as demonstrating the utility of targeted sanctions. Multilateral sanctions imposed on Libya from 1992 to 1999 were not comprehensive and covered only an embargo on arms sales, air travel, some downstream oil activities and the freezing of non-oil-related Libyan assets held abroad. The assessment of the effectiveness and utility of sanctions remains inconclusive, due to a disagreement over the extent to which they played a role in Qadhafi's decision to end Libya's support for terrorism and to give up its nuclear program. Regarding support for terrorism, Drezner and Niblock argue that the Libyan government had itself abandoned such support in 1989 — long before UN sanctions were imposed — as a consequence of the demise of its Soviet sponsor.⁹⁰ "There were no reports of Libyan support for international terrorism during the 1990-92 period or after."⁹¹ Similarly, Drezner argues that "other factors" than sanctions accounted for Libya's decision to alter its policies.⁹² Still others argue that sanctions were "a central factor" in the negotiations that convinced the regime to reduce its support of international terrorism.⁹³

A consensus on the role of sanctions in Libya's decision to end the development of its WMDs in 2003 is also lacking. Despite disagreement over the exact weight of sanctions in the mix, there seems to be a clear consensus that a combination of diplomatic, economic and military coercion rather than sanctions alone convinced Qadhafi's regime to change its policy on WMDs. More specifically, it was a combination of "Qadhafi's quixotic nature" and the use of different policy tools that altered Libya's course: back-channel negotiations, the Proliferation Security Initiative, and the unspoken threat of invasion after Operation Iraqi Freedom.⁹⁴ According to former Vice President Dick Cheney, Libya's concession on WMD was "one of the great by-products…of what we did in Iraq and Afghanistan," adding that just "five days after we captured Saddam Hussein, Muammar Qadhafi came forward and announced that he was going to surrender all of his nuclear materials to the United States."⁹⁵

Others viewed sanctions and the overall carrot-and-stick diplomacy as playing a more significant role, with Deputy Secretary of State Richard Armitrage arguing that Saddam's capture "didn't have anything to do" with the change in Libya's policies.⁹⁶ The timing is, however, suspicious: Qadhafi reached the agreement to surrender WMD six days after the capture of Hussein and agreed to compensate the families of victims of the Lockerbie bombing just a few weeks⁹⁷ before the invasion of Iraq, strengthening the argument that Qadhafi's decision was to a great extent a product of military force.

To address the main question of this paper — how leaders in authoritarian states have been able to survive lengthy economic sanctions without their suffering populations rising up against their regimes — a short discussion of political economy and the state-society relationship in Libya under the multilateral sanctions is in order. Living conditions in Libya deteriorated dramatically after sanctions were imposed. However, the sanctions did not by any means reach the extent, comprehensiveness and impact of those imposed on Iraq. Most important, although they forbade the export to Libya of equipment necessary for extracting and transporting oil to export terminals, the sanctions did not ban the sale of oil as such. Libya exported more oil in the mid-1990s than in the 1980s.⁹⁸ Libya's oil revenues were severely battered from the early 1990s until 1997 not by sanctions but by the dramatic decline in oil prices. UN sanctions, however, did seriously cripple the downstream oil sector, forcing Libya to acquire needed equipment on the black market at four times the price.⁹⁹ Moreover, Libya retained access to its capital in OECD-based banks under the UN sanctions and was also able to maintain a diminished but steady inflow of largely European investment in its oil sector.¹⁰⁰

With the UN flight ban and with international companies scaling back their business with Libya due to the uncertain climate caused by sanctions, prices of goods skyrocketed, triggering an average inflation of 35 percent over the entire period.¹⁰¹ As in Iraq, the inflation had a massive impact on people's standard of living and led to a sharp increase in dependence on government subsidies. In sharp contrast to the Iraqi case, rations provided by the Libyan government were "generally sufficient" to meet a family's needs.¹⁰² However, Niblock points out that "it would have been very difficult for many families to survive without rations."¹⁰³ As in Iraq, conditions under the sanctions led to the gradual development of a parallel illicit economy and the rise of a new commercial elite with access to the government, foreign currency and international contacts.¹⁰⁴

IRAN

Economic sanctions have become the cornerstone of Western efforts to pressure Iran into abandoning its nuclear program. Although it is too early to predict how the Iranian crisis will unfold, nascent socioeconomic dynamics parallel to those seen in the two previous cases are unfolding. With the United States and the European Union enforcing a total oil embargo and cutting Iran off from the global banking system, targeted sanctions have become increasingly comprehensive. The Iranian people are starting to feel the brunt, with some accounts suggesting that, while those at the top are unaffected by or even benefit from the sanctions, ordinary citizens have to bear the burden.¹⁰⁵ As in Iraq and Libya, many ordinary Iranians perceive growing economic pressure as unfair and rather ineffective: "We know they want to pressure us so we rise against our government, but we are not in a position to do that," said one Iranian. As an expert pointed out, "Like many middle and lower-class Iranians, [this person] seemed to blame both his own government and the West for his plight."¹⁰⁶

The black market is flourishing. For instance, the price of some pharmaceuticals, such as a breast cancer drug, has nearly doubled in the past year. Also, since radiology machines used for cancer treatment are not allowed under the "dual use" provisions, about 1,200 cancer patients a year are denied treatment. Moreover, with food prices and inflation skyrocketing, Iran has already begun stockpiling rice and wheat for worse times to come.

Also, as in Iraq and Libya, Iran has gradually adjusted its economy to sanctions and developed ways around them. This is hardly surprising, considering that Iran has been a target of sanctions for the last 33 years. According to Foreign Minister Ali Akbar Salehi, Iran had learned to cope with Western economic sanctions after the 1979 Iranian revolution, and no sanctions would convince Iran to change its position on its nuclear program, which the Iranians regard as their legal right.¹⁰⁷ Moreover, in an interview, Ali Akbar Javanfekr, an adviser to President Ahmadinejad, dismissed the sanctions as counterproductive: "Iranians suffered worse isolation during the 1980s and always found ways around them." Some Iranian businessmen make similar comments, saying that "there are always ingenious new ways to sell oil and to transfer money," adding, "The people who will suffer most from sanctions are not the ones who can pressure the government for change."¹⁰⁸ Although the Iranians have by no means reached the level of deprivation of the Libyan or Iraqi people under sanctions, any further tightening or a prolonged period under the full oil embargo might lead to that result, making them completely dependent on the government.

So far, however, the Iranian regime has been able to get around the sanctions and generate sufficient revenue to sustain itself in power, using strategies similar to those identified in the Iraqi and Libyan cases. For instance, in its effort to exchange its devaluated currency, the rial, for the U.S. dollars necessary to pay for imports, the Tehran government and various traders have been using several Afghan banks to transfer money in and out of Afghanistan. According to the president of Afghanistan's Money Exchange Union, "The cash comes across in trucks, with transfers arranged by Afghan middlemen who take a 5 to 7 percent commission."¹⁰⁹ Cash is reportedly transported directly across the border with Iran and through Pakistan.

Iraq is also helping Iran to get around sanctions. According to current and former American and Iraqi government officials and experts on its banking sectors, Iraq is involved in "a network of financial institutions and oil-smuggling operations that has provided Iran with a crucial flow of dollars."¹¹⁰ Western-based banks that operate globally have also been revealed to be funneling billions of dollars to Iran.¹¹¹

Moreover, despite the oil embargo, the Iranian government is still able to extract significant revenues legally due to the U.S. inability to force certain countries to comply. Although Iran's oil exports are down by 40 percent compared to 2011, 19 countries have already been granted exemption by the United States to continue importing Iranian oil as a reward for at least significantly reducing these purchases. The most recent waiver was granted to China, Iran's top oil importer. The waiver reportedly "reflects the difficulties the Americans have faced in persuading China to curtail its Iranian oil purchases."¹¹² However, even before the waiver, China's purchases had declined by only 25 percent compared to 2011. India, another important importer of Iranian oil, has also signaled that it will not significantly cut back oil imports from Iran. As in the Iraqi and Libyan cases, all this suggests that, while ordinary Iranians suffer the effects of sanctions, the regime and its cronies continue to take in sufficient revenue to sustain themselves in power.

CONCLUSIONS

In the effort to demonstrate why economic sanctions imposed on authoritarian regimes often fail to bring about the political change they are meant to create, this paper has explored the nature of political economy and the state-society relationship in Iraq and Libya. Both cases illustrate that authoritarian regimes are better equipped to shift the burden of sanctions to their populations while making the cost of anti-governmental action prohibitively high. Although it was the people who bore the cost of sanctions, in neither case did the impact of sanctions translate into bottom-up political change, as the "deprivation perspective," which has influenced American foreign policy toward recalcitrant regimes, would predict. Sanctions tend to reorganize the political economy of the target state in ways that, paradoxically, strengthen authoritarian regimes. Ration systems and the rise of illicit trade from which the state captures revenues, both strengthen the state relative to those who otherwise might overthrow the regime. Moreover, as the Iraqi case illustrates, the people in such states tend to find themselves sanctioned twice — by the internationally imposed sanctions and by their own regime.

Most important, the two examples demonstrate that any examination of the efficacy of sanctions is ultimately limited to single cases. Generalizations are rather difficult, given the variety of factors that may contribute to the effectiveness of sanctions. Both cases also illustrate that factors other than the domestic political economy of sanctions may explain their success or failure. In the case of Iraq, the failure of societal deprivation to destabilize the regime from the bottom-up was exacerbated by the fact that the Iraqis had previously risen up against Hussein in 1991, only to see the very states that had imposed sanctions reluctant to support their rebellion. Consequently, it is difficult to untangle Iraqis' dependence on the ration system from the Bush administration's choice not to help them during the uprisings.

Generalizations across cases have proven to be difficult; it is far from obvious whether the Iranians would interpret their 2009 anti-government uprising along similar lines. As the Libyan case implies, a particular context and a combination of specific external factors may play a much greater role in decision making than the sanctions themselves. As one scholar has pointed out, despite all the theories, an analysis must ultimately be "actor specific."¹¹³ Scholars can draw "conditional generalizations about what lessons from case X apply to a similar case Y, so long as they also take into account the ways in which the two cases are different."¹¹⁴ For instance, if the 2003 Iraq war altered or significantly contributed to Qadhafi's decision to end the development of WMDs, it is easy to imagine that the 2011 bombing of Libya may, in contrast, have demonstrated to Iran the real value of possessing WMDs, further strengthening its determination not to relinquish them. Similarly, it is not clear whether the current context, shaped by the revolutions of the Arab Spring, will strengthen or weaken the Iranians' proclivity to revolt as their living conditions further deteriorate. Arab Spring states have yet to demonstrate that life after the revolution is better, the case of Syria being far from encouraging. At the same time, fear of the inevitability of conflict may lead the Iranians to choose the lesser of two evils: If they do not rise up against their government to end the development of WMD, they may become victims of a war initiated externally. If they do rise against their government to protest the effect of sanctions on their lives, they may become victims of a war waged by their own regime.

The brief exploration of the Libyan situation also suggests that the common classification of Libya as a case where sanctions were "successful" is rather problematic. In authoritarian states, the personalities of individual leaders can have enormous consequences. Qadhafi was quixotic and acceded more quickly than predicted. Second, the timing of Libya's concessions suggests that the U.S.-led invasion of Iraq moved the Libyan government more than the sanctions themselves. This suggests that sanctions may be necessary but not sufficient to compel states to give up WMD. Perhaps sanctions must have the backing of credible threats of military force. The problem, of course, is that parallel situations rarely arise.

Despite their perverse effect within authoritarian states, economic sanctions will likely remain a popular foreign-policy tool. Sanctions have proven to be an effective means of coercion, proving critical in containing both the Iraqi and Libyan regimes militarily. Weapons sales to Libya virtually ended under the period of multilateral sanctions. In Iraq, the sanctions prevented the rebuilding of the military after the first Gulf war and eroded Iraq's WMD program by blocking the import of necessary technologies. There have been rumors of a similar situation's occurring in Iran. There can be no doubt that sanctions will continue to at least retard the Iranian nuclear program and hinder the state's ability to build up its military forces.