V. Rationale for Oil Sanctions
As a leading economic and military power, the United States has some capability to influence the behavior of other regimes. Whether and how to do so are difficult questions, endlessly debated in foreign policy making circles and among foreign policy intellectuals and the media. Many believe that the availability of on-site television images has heightened the public’s awareness of events in other countries and with this the demand for policy actions to modify the behavior of one or another foreign regime.
What options are available to effect such behavior modification? For present purposes, only three broad categories of policy are identified; the use of force, the use of economic tools, and the use of diplomatic and other means to challenge the legitimacy of another regime. For a number of reasons (e.g. the Vietnam War experience, rising weapons capability on the part of smaller countries) the U.S. has become more cautious in the use of force, though instances involving Iraq, Haiti, Grenada and Panama suggest there are circumstances where this option will be employed. The use of diplomacy and other means to threaten the legitimacy of a regime can take a variety of forms, e.g. public condemnation by the U.S. or via the UN, a ban on cultural exchanges, a ban on Olympic Games participation, overt or public support for an alternative regime for that country, etc. Some of these involve multilateral action while others can be carried out by the U.S. alone.
Economic sanctions too can take many forms, e.g. denial of U.S. foreign aid, denial of access to multilateral lending institutions such as the World Bank or trade sanctions. Oil trade sanctions are a principal tool within this last category. Oil often is chosen for sanctions because it is a primary export of countries the U.S. is attempting to influence, because a good deal of income can be earned from its export (and hence potentially denied to the targeted regime), and because its origin and its movement can be fairly easily detected.
How might the employment of oil sanctions persuade foreign regimes to modify their behavior? First, their use might be taken as a sign of the seriousness with which the U.S. government regards certain actions by a sanctioned regime, and so could be viewed as a signal both by the targeted regime and by others. Since the U.S. potentially can take a wide variety of other steps that might affect another regime, including sponsoring the use of force, such a statement of seriousness conceivably could serve as a warning which would affect both the behavior of the offending regime and that of other regimes which might otherwise engage in the objected-to activity.
Second, insofar as sanctions reduce the wealth or income of the affected country, this could deny resources to the offending regime with which to conduct the objected-to activities (this is a principal reason for the present worldwide sanctions on Iraqi oil exports). In addition, such wealth reduction could affect the regime’s behavior indirectly, through denial of resources that it desires for other purposes.
A third reason for the use of sanctions is to satisfy an internal political demand to take action against a regime whose actions the U.S. public deplores, but against which it is unwilling to utilize armed force. For this purpose, the action of bringing sanctions itself is meaningful, whether or not they modify the targeted regime’s behavior, since the public’s desire is to dissociate the U.S. from an offending regime, not solely to affect its behavior.
What can be said of these various rationales for U.S. sanctions?
First, economic analysis implies that behavior is affected by a change in costs or rewards at the margin. A serious problem with oil or other trade sanctions as a foreign policy tool is that they do not operate there. Instead, such sanctions generally are blunt, in force or not, and are not easily adjusted with the degree of deplored activity the offending regime chooses to engage in.
Second, for sanctions to serve as a tool to affect behavior in directions the U.S. desires, they have to be effective, actually constraining the targeted regimes. If this does not occur, such sanctions may be viewed by others, including the targeted regime, as indicating U.S. unwillingness or even incapability to seriously affect events abroad.
Third, even if oil or other sanctions deny wealth, it is not clear that this will always affect behavior in the direction desired. For example, in some cases the assumption that increased wealth results in more objectionable behavior by the regime may be wrong. Activities to suppress political opposition, for example, may be a substitute rather than a complement to the use of wealth to satisfy troublesome domestic constituencies.
Fourth, the use of unilateral sanctions by the United States may not only create business opportunities for others, but lead also to alliances between the sanctioned country and countries whose commercial interests wish to take advantage of the new opportunities. Such alliances, if they form, would make it even more difficult to achieve the U.S. objectives that the sanctions are being used for.
Fifth, a political demand within the U.S. for actions against another regime might be met in other ways. Strong and repeated statements of disapproval by U.S. government officials might be one such way. Dip-lomatic weapons such as the seeking of UN condemnation might be an-other, and publicized efforts to deny the regime access to World Bank or other multinational institutional funding or to athletic or cultural events yet another.
Many opponents of economic sanctions argue that continued engagement is a better way to achieve U.S. aims. By engagement they mean people to people contacts, via trade and investment, travel, educational exchanges and the like. Advocates of engagement argue that over time it will allow the direct spreading of U.S. culture, enhance the wealth of others besides the regime (which might be used to counter the activities the U.S. objects to), and generally lead to rising citizens’ pressure on regimes to change their behavior in ways consistent with U.S. desires. Since trade and other economic relationships are likely to yield results fairly slowly, over many years, this argument implicitly assumes that it is preferable to take a longer run view towards changing an offending regime’s behavior, and that engagement is the more effective tactic over the longer term.