Economic Sanctions
Cutting off trade, money, or technology to force a government to change course: the most used tool in modern statecraft, and one that usually fails.
Sanctions are the deliberate cutting off of economic ties, trade, finance, technology, or travel, to punish a government or force it to change course. They sit between a diplomatic protest and a war, which is exactly why governments reach for them. They look like action and cost the country imposing them very little.
The modern version started with the League of Nations. Woodrow Wilson called the economic weapon a peaceful, silent, deadly remedy that would make war unnecessary, and Article 16 of the League Covenant made economic pressure against an aggressor automatic. It was tried against Italy over Ethiopia in 1935, with oil pointedly left off the list of banned goods, and it failed. Sanctions with a hole in them are worse than none, and that lesson has had to be relearned repeatedly.
From blunt to targeted
Total embargoes fell out of favor because of Iraq. The trade ban imposed in 1990 and kept up through the decade wrecked the civilian economy, produced the corrupt oil-for-food program, and did nothing to loosen Saddam Hussein's grip. By the early 2000s the fashion had shifted to targeted sanctions: freezing named individuals' assets, blacklisting specific companies, and banning particular technologies instead of an entire economy.
The machinery that makes this work is mostly American, and it runs on the dollar. The Office of Foreign Assets Control at the US Treasury keeps the list of blocked people and companies. Almost any dollar payment clears through New York at some point, which puts almost any cross-border transaction under American jurisdiction. Secondary sanctions extend the threat to foreign firms that deal with a target even when no American is involved, which is how Washington regulates other countries' trade. When BNP Paribas paid an $8.9 billion penalty in 2014 for processing payments for sanctioned states, every large bank in the world learned to stay well clear of the line. Cutting banks out of the SWIFT messaging system and blocking exports of advanced semiconductors work the same way: control one point everyone has to pass through.
Do they work?
Usually not. The standard survey of decades of cases finds partial success in roughly a third of them, and the successes cluster where the goal was modest, the coalition was broad, and the measures came all at once rather than in slow increments. Sanctions almost never produce regime change or force a government to give up something it considers essential to its survival. They reliably impoverish ordinary people, enrich the smugglers and officials who control the workarounds, and hand the targeted government a foreign enemy to blame.
The program against Russia after 2022 is the largest ever aimed at a major economy: about $300 billion of central bank reserves frozen, a price cap on oil exports, thousands of individual designations. It imposed real costs and did not stop the war, because Russia rerouted its trade through countries that declined to take part.
There is also a slower cost to Washington. Every time the dollar system is used as a weapon, other governments get a reason to build something else. Central banks have been buying gold, China has built its own cross-border payment system, and Russia and its trading partners now settle much of their business in other currencies. Sanctions work because nearly everyone uses the American financial system. The more often they are used, the harder other countries try to stop using it.