Collateral Damage Autocracy?

On the Impact of Economic Sanctions on the Political System

by Tobias Lechner (Author)
©2020 Thesis 242 Pages


Anecdotal and empirical evidence suggests that economic sanctions, a popular tool of modern foreign policy, have a negative collateral damage to the political system of the target state. However, it is not clear under which circumstances sanctions have an autocratizing effect. Newer data on sanctions and regimes enable testing the most plausible hypotheses. The quantitative analysis finds that sanctions with high economic costs do not cause autocratization. Sanctions are not as bad – and perhaps not as useless – as many fear.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the author
  • About the book
  • This eBook can be cited
  • Contents
  • List of abbreviations
  • Abstract
  • Executive summary
  • 1 Sanctions: Useful toys of diplomacy or disastrous weapons of mass destruction?
  • 1.1 Anecdotal evidence
  • 1.1.1 Yugoslavia 1992–1995
  • 1.1.2 Iran 2006–2016
  • 1.2 The analytical puzzle
  • 1.3 Relevance and novelty
  • 1.4 Defining and conceptualizing sanctions
  • 1.5 Outline of the book
  • Part I Reviewing
  • 2 The collateral damage of sanctions
  • 2.1 Economic sanctions in an age of interdependence
  • 2.1.1 Pre-modern era
  • 2.1.2 League of Nations
  • 2.1.3 United Nations
  • 2.1.4 Re-design: Targeted sanctions
  • 2.2 Impact on democracy
  • 2.3 Redistribution of wealth
  • 2.4 Rally around the flag
  • 2.5 Repression
  • 2.6 Destabilizing
  • 2.7 Determinants of sanctions effectiveness
  • 2.8 Determinants of autocratization
  • 2.8.1 Democracy in retreat
  • 2.8.2 Autocratization
  • 2.8.3 Triggers of autocratization
  • 3 Explanatory factors
  • 3.1 A multidimensional definition of democracy and autocracy
  • 3.1.1 State capacity
  • 3.1.2 Political rights
  • 3.1.3 Civil liberties
  • 3.1.4 Sequence of rights
  • 3.1.5 A multi-dimensional model
  • 3.2 Sanctions variables: Economic costs and democratic goal
  • 3.2.1 Economic costs of sanctions to the target
  • 3.2.2 Democratic goal of sanctions
  • 3.3 Regime variables: Personalism and legitimacy
  • 3.3.1 Personalist regime
  • 3.3.2 Regime legitimacy
  • 3.4 Economic variables: Vulnerability and development
  • 3.4.1 Vulnerability
  • 3.4.2 Development
  • 3.5 Control variables: Natural resources and war
  • 3.5.1 Natural resources
  • 3.5.2 Civil war
  • 3.6 Summary
  • Part II Designing
  • 4 The market of political survival
  • 4.1 Players: Horizontal and vertical threats
  • 4.2 Tools: Repression, economic transfers, political power
  • 4.2.1 Repression
  • 4.2.2 Economic transfers
  • 4.2.3 Political power
  • Vertical: Co-optation
  • Horizontal: Enfranchisement
  • 4.3 Integrating the variables
  • 4.3.1 Economic costs of sanctions
  • 4.3.2 Democratic goal of sanctions
  • 4.3.3 Personalist regime
  • 4.3.4 Regime legitimacy
  • 4.3.5 Economic vulnerability
  • 4.3.6 Development
  • 4.3.7 Natural resources
  • 4.3.8 Civil war
  • 4.4 Overview process
  • 5 Methodology
  • 5.1 Unit of analysis
  • 5.1.1 Time
  • 5.1.2 Excluded cases
  • 5.1.3 Case coding
  • 5.1.4 Sources
  • 5.2 Operationalizing the dependent variable
  • 5.3 Operationalizing the independent variables
  • 5.3.1 Economic costs of sanctions
  • 5.3.2 Democratic goal
  • 5.3.3 Personalist regime
  • 5.3.4 Regime legitimacy
  • 5.3.5 Economic vulnerability
  • 5.3.6 Development
  • 5.4 Operationalizing the control variables
  • 5.4.1 Natural resources
  • 5.4.2 Civil war
  • 5.5 Limitations
  • 5.6 Econometric model
  • Part III Evaluating
  • 6 Findings
  • 6.1 Main model
  • 6.2 Robustness checks
  • 6.2.1 Multicollinearity
  • 6.2.2 Resource-rich states and civil war states
  • 6.2.3 Time
  • 6.2.4 Autocracies and global trend
  • 6.3 Interpretation
  • 6.3.1 Variable 1: Economic costs of sanctions
  • 6.3.2 Variable 2: Democratic goal of sanctions
  • 6.3.3 Variable 3: Personalist regime
  • 6.3.4 Variable 4: Regime legitimacy
  • 6.3.5 Variable 5: Economic vulnerability
  • 6.3.6 Variable 6: Development
  • 6.3.7 Sanction design
  • 6.3.8 Re-conceptualizing
  • 7 So what? Implications and recommendations
  • 7.1 Metatheoretical implications
  • 7.1.1 Ontology of success
  • 7.1.2 Epistemological issues
  • 7.1.3 Methodological bias and manipulation
  • 7.2 Research recommendations
  • 7.2.1 Sanctions-related research recommendations
  • 7.2.2 Regime-related research recommendations
  • 7.3 Policy recommendations
  • 7.4 A Kantian use of economic statecraft
  • 7.5 Lessons learned
  • Appendix
  • A. Cases of economic sanctions
  • B. Types and goals of sanctions
  • C. Results
  • List of figures
  • Bibliography
  • Series Index


Economic sanctions are a popular tool of modern foreign policy. However, they may have a negative collateral damage to the political system of the target state. The leader shifts the costs of sanctions from his supporters to the population and uses the opportunity to centralize power. Furthermore, the external threats enable him to blame enemies abroad for his (economic) mismanagement. Though anecdotal and empirical evidence supports the basic argument, it is not clear under which circumstances sanctions have an autocratizing effect. Newer data on sanctions and regimes enable to test the most plausible hypotheses. Several variables try to explain the negative impact of economic sanctions on the level of democracy: the economic costs of sanctions, a democratic goal of sanctions (sanctions designed for improving democracy), a personalist regime, the level of regime legitimacy, the level of economic vulnerability, and the level of development. All sanctions by the UN, the EU and the U.S. that were imposed between 1990 and 2015 are used for the quantitative analysis. Surprisingly, none of the sanctions variables had a negative impact on the level of democracy. Both economic costs and democratic goal correlate with a higher level of democracy, as well as the level of development. The analysis contributes with several key findings to the debate: Sanctions with high economic costs do not cause autocratization. Aid sanctions and arms embargoes correlate with a higher level of democracy; the type of sanction is crucial for its side-effects. Sanctions are not a binary variable and should not be used as such in quantitative analyses. Sanctions have a de jure goal and a de facto goal; an evaluation of sanctions that is only based on the de jure goal is misleading. In summary, sanctions are not as bad – and perhaps not as useless – as many fear.

Keywords: Economic sanctions; Coercive diplomacy; Regime types; Autocracies; Democratization

Executive summary

Research puzzle

Anecdotal evidence suggests that economic sanctions have a negative impact on the political sphere. Several prominent cases in the last decades show how leaders of a state that is targeted by sanctions use those to their advantage. One example is Yugoslavia in the early 1990s. The UNSC imposed comprehensive economic sanctions on Yugoslavia to end Milosevic’s involvement in the war in Bosnia-Herzegovina. However, the sanctions rents benefited mainly Milosevic and his clique. They boosted a black market that gave rise to a powerful criminal class with ties to the regime; and the disruption of trade benefited state-owned enterprises and the economic-political elite. Moreover, Milosevic could blame outsiders for his own economic mismanagement. The external threat created a pro-regime rally around the flag. These sanctions lead to a weakening of the opposition and democratic reform efforts.

Large-N evidence supports the claim that sanctions have an autocratizing effect. Scholars found that sanctions increase repression, cause protectionism, strengthen the leader, enhance economic transfers from the population to the leader’s coalition, decrease the level of political freedoms and democracy in general. Though there is anecdotal and large-N evidence, it is still puzzling why sanctions have such a negative collateral damage. Especially in the last decades, sanctions were increasingly aimed at enhancing the level of democracy and designed in the respective way. New data and variables that combine insight from different strands of literature encourage to ask the question: Why do some economic sanctions have a negative impact on the level of democracy in the target state but others not?

Sanctions are defined as a set of rules that restrict a state. Economic sanctions are a set of economic rules that restrict a state. They are imposed by a state, a regional organization or an international organization, on another state or entities or individuals related to that state. By coercing, constraining or signaling, sanctions are imposed to achieve a non-economic policy goal. Sanctions can include non-economic measures (such as visa ban, diplomatic sanctions). Sanctions can include economic measures (trade ban, investment ban), then they are called economic sanctions. Usually, sanctions include non-economic and economic measures.

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Literature review

Despite their long history, economic sanctions became target of an academic debate only in the last decades. Especially after the numbers of sanctions exploded in the 1990s, the debate got more aggressive. The overwhelming majority of scholars holds a very negative view about the success of sanctions. After the devastating impact of sanctions in Iraq was known, the focus of academics shifted from the question of success to the question of impact, and scholars published many analyses on the unintended side-effect of economic sanctions on mainly humanitarian issues like health, but also on human rights and democracy.

Recent articles analyze in large-N studies the impact of sanctions on the level of democracy: Using data between 1972 and 2000, Peksen et al. find that the effects of economic sanctions significantly reduce the level of democracy in the target state.1 They argue that sanctions restrict the flow of goods to the targeted country, the remaining goods within the state are controlled by the regime which gets more powerful than before. Using newer data, Soest et al. conclude that sanctions with a democratic goal correlate with an increased level of democracy in the targeted state, thus suggesting that democratic sanctions are successful.2


The dependent variable is the level of democracy. Definition: A liberal-democratic state is a state with an overall high level of political rights, civil liberties, and state capacity. Political rights include political participation and political pluralism; civil liberties include individual rights, checks and balances and restrictions of the executive; state capacity refers to governance and performance of the state. An autocratic state is a state with an overall low level of political rights, civil liberties, and state capacity. The low level of state capacity can be explained with the low level of public goods invested by the leader. He invests resources into his supporters to buy their loyalty, not into the state.

There is no universally accepted variable that can explain either democratization or autocratization. Consequently, a large number of explanatory variables can be found in democratization literature. Due to methodological reasons the number of variables is limited. Anecdotal and empirical evidence and current research suggest the use of explanatory variables from three different spheres: the ←18 | 19→impact and design of sanctions, the political system of the targeted state, and economic characteristics of the target state.

Hypothesis 1: The higher the economic costs of the sanctions to the target state are, the more likely is a negative impact on the level of democracy in the target state. Economic costs of sanctions are the main argument in many articles. High economic costs make success and unintended side-effects more likely. In many cases, they hurt the opposition more than the government. Furthermore, the regime’s monopoly on law gives members of the leader’s coalition a huge advantage in conducting illegal (or somewhat legal) activities. Additionally, economic sanctions lead to protectionism and, in the long-term, to the rise of powerful interest groups that lobby for market protection. Definition: Economic costs of sanctions is the amount of wealth of the target state that gets lost due to sanctions.

Hypothesis 2: The less sanctions focus on democracy, the more likely is a negative impact on the level of democracy. Sanctions with a democratic goal correlate with an increased level of democracy, find Soest & Wahman.3 They are designed in an effective way not to have a negative effect on the level of democracy. Definition: The democratic goal of sanctions is the explicitly stated aim of sanctions senders to increase the level of democracy by using these sanctions.

Hypothesis 3: The more personalized rule in the target country is, the more likely is a negative impact on the level of democracy. Sanctions literature suggests that the target’s regime type is one of the most important factors of sanctions success. Based on Geddes,4 Wright focuses on institutional differences among regimes and distinguishes personalist regimes from institutionalist regimes (military, dominant party, corporatist/monarchist).5 Personalist leaders can more easily redistribute goods in times of economic crises such as sanctions. Furthermore, institutionalized regimes offer peaceful leadership change through succession rules, whereas a personalist regime will shift the economic costs away from his key supporters to other groups and the population. The book adds liberal democracies to institutionalist regimes to categorize the whole universe of regimes. Definition: A personalist regime is a regime in which power is institutionalized on a low level. Effective rule and leadership succession depend on one person or his personal network.

Hypothesis 4: The higher the level of legitimacy of the ruler in the target country is, the more likely is a negative impact on the level of democracy. A psychological ←19 | 20→effect might strengthen the leader: A high level of legitimacy reduces the costs of loyalty for the leader. A recent large-N study finds that “sanctions strengthen authoritarian rule if the regime manages to incorporate their existence into its legitimation strategy.”6 Definition: Regime legitimacy is the acceptance of political authority.


ISBN (Hardcover)
Publication date
2020 (March)
Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2020. 242 pp., 21 fig. b/w.

Biographical notes

Tobias Lechner (Author)

Tobias Lechner received his Ph.D. in Political Science summa cum laude from Freie Universität Berlin. His research focuses on economic statecraft in international relations.


Title: Collateral Damage Autocracy?
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244 pages