Estimating causal effects of sanctions impacts: what role for country-level studies?

RODRIGUEZ, FRANCISCO (2023): Estimating causal effects of sanctions impacts: what role for country-level studies?

Abstract

This article reviews recent advances in addressing empirical identification issues in cross-country and country-level studies and their implications for the identification of the effectiveness and consequences of economic sanctions. I argue that, given the difficulties in assessing causal relationships in cross-national data, country-level case studies can serve as a useful and informative complement to cross-national regression studies. However, I also warn that case studies pose a set of additional potential empirical pitfalls which can obfuscate rather than clarify the identification of causal mechanisms at work. Therefore, the most sensible way to read case study evidence is as a complement rather than as a substitute to cross-national research.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic sanctions, Cross-country regressions, case studies, identification
• Subjects: F - International Economics > F5 - International Relations, National Security, and International Political Economy > F51 - International Conflicts ; Negotiations ; Sanctions

References

Angrist, Joshua and Jörn-Steffen Pischke. “The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics’”, Journal of Economic Perspectives, 24(2), (2010): 3-30. doi:10.1257/jep.24.2.3

Angrist, Joshua and Jörn-Steffen Pischke. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton University Press, 2009.

Angus, Deaton. “Instruments, Randomization, and Learning about Development,” Journal of Economic Literature, 48(2), (2010): 424-455. doi:10.1257/jel.48.2.424

Bahar, Dany, Sebastian, Bustos, José, Morales-Arilla, and Miguel Ángel, Santos. “Impact of the 2017 sanctions on Venezuela: Revisiting the evidence.” Brookings Institution. May 14, 2019. https://www.brookings.edu/research/revisiting-the-evidence-impact-of-the-2017-sanctions-on-venezuela/

Cunningham, Scott. Causal Inference: The Mixtape. New Haven, CT: Yale University Press, 252-282, 2021.

Durlauf, Steven. “The Rise and Fall of Cross-Country Growth Regressions,” History of Political Economy, 41(5), (2009): 315-333. 10.1215/00182702-2009-030

ENCOVI. Condiciones de vida de los venezolanos ENCOVI 2022 [online]. Encuesta Nacional Sobre Condiciones de Vida. November, 2022. https://www.proyectoencovi.com/encovi-2022

Equipo ANOVA “Impacto de las Sanciones Financieras Internacionales contra Venezuela: Nueva Evidencia,” ANOVA Policy Research, 3(1), (2021).

Guerrero, Guillermo. (2022). Country Report: Setting the Record Straight on Economic Recovery. EMFI, (accessed 10 January 2023).

Gutmann, Jerg, Matthias Neuenkirch and Florian Neumeier. “The Economic Effects of International Sanctions: An Event Study,” Research Papers in Economics, No. 3/21, Universität Trier, Fachbereich IV - Volkswirtschaftslehre, Trier. (2021). http://dx.doi.org/10.2139/ssrn.3821520

Gutmann, Jerg, Matthias Neuenkirch, Florian Neumeier and Armin Steinbach. “Economic sanctions and human rights: Quantifying the legal proportionality principle,” ILE Working Paper Series, No. 12, University of Hamburg, Institute of Law and Economics (ILE), Hamburg. (2018). 10.2139/ssrn.3175885

Hufbauer, Gary Clyde, Jeffrey Joseph Schott and Kimberly Ann Elliott. Economic Sanctions Reconsidered: History and Current Policy. Washington, D.C. Institute for International Economics, 1990.

Huntington-Klein, Nick. The Effect: An Introduction to Research Design and Causality. London, United Kingdom. Routledge Press, 2021.

Kübler, Dorothea, Julia, Schmid and Robert, Stüber. “Gender discrimination in hiring across occupations: a nationally-representative vignette study.” Labour Economics. 5, (2018): 215 – 229. https://doi.org/10.1016/j.labeco.2018.10.002

Leamer, Edward E. “Let’s Take the Con Out of Econometrics,” The American Economic Review, 73(1), (1983): 31-43.

List, John and Imran Rasul. “Field Experiments in Labor Economics.” In Handbook of Labor Economics, edited by Orley Ashenfelter and David Card, 103 – 228, Amsterdam, Netherlands: Elsevier, 2011.

McKenzie, David. (2016). “Comments on “The Influence of Randomized Controlled Trials on Development Economics Research and on Development Policy”” by Banerjee, Duflo, and Kremer. World Bank. https://drive.google.com/file/d/0B9C9RwWKZrUNbUY3Z3JSSUxyRk0/view?resourcekey=0-nYaiwgWXODMf6U7qGyVbpA

Neuenkirch, Matthias and Florian Neumeier “The Impact of UN and US Economic Sanctions on GDP Growth,” European Journal of Political Economy, 40A, (2015): 110–125. https://doi.org/10.1016/j.ejpoleco.2015.09.001

Neuenkirch, Matthias and Florian Neumeier. “The Impact of US Sanctions on Poverty,” Journal of Development Economics, 121, (2016): 110–119. https://doi.org/10.1016/j.jdeveco.2016.03.005

Oliveros Luis. “Impacto de las sanciones financieras y petroleras en la economía venezolana.” Washington Office on Latin America (WOLA), Washington, D.C. October, 2020. https://www.wola.org/wp-content/uploads/2020/10/Oliveros-Resumen-FINAL.pdf

President of the United States. (2017). Executive Order 13808: Imposing Additional Sanctions with Respect to the Situation in Venezuela, Federal Register, 82(168), 44973-44976.

R4V. (2022). “Venezuelan refugees and migrants in the region. Inter-Agency Coordination Platform for Refugees and Migrants from Venezuela,” December, 2022. https://www.r4v.info/en/document/r4v-latin-america-and-caribbean-venezuelan-refugees-and-migrants-region-dec-2022

Rodríguez, Francisco. “Sanctions and Imports of Essential Goods: A Closer Look at the Equipo Anova (2021) Results,” Arvix. (2022a). https://doi.org/10.48550/arXiv.2212.09904

Rodríguez, Francisco. “Sanctions and Oil Production: Evidence from Venezuela’s Orinoco Basin.” Latin American Economic Review, 31(6), (2022b).

Rodríguez, Francisco. “Sanctions and the Venezuelan economy: What the data say, Latam Economics Viewpoint.” June, 2019. https://torinocap.com/wp-content/uploads/2019/06/Sanctions-and-Vzlan-Economy-June2019.pdf

Rodríguez, Francisco. “The Human Consequences of Economic Sanctions.” Center for Economic and Policy Research (CEPR), May 4, 2023. https://cepr.net/report/the-human-consequences-of-economic-sanctions/

Rodríguez, Francisco and Patrick Imam “Political Growth Collapses,” SSRN Working Paper. (2022a). http://dx.doi.org/10.2139/ssrn.4153885

Rodrik, Dani. “Why We Learn Nothing from Regressing Economic Growth on Policies,” Seoul Journal of Economics, 25(2), (2012): 137-151.

U.S. Department of the Treasury. FAQ 817. What is the significance of OFAC’s designations of Rosneft Trading S.A. and TNK Trading International S.A.? Do the E.O. 13850 blocking sanctions on Rosneft Trading S.A. and TNK Trading International S.A. apply to their corporate parent and their affiliates? U.S. Department of the Treasury. n. d. https://home.treasury.gov/policy-issues/financial-sanctions/faqs/817

U.S. Department of Treasury. Treasury Sanctions Central Bank of Venezuela and Director of the Central Bank of Venezuela. U.S. Department of the Treasury. April 17, 2019a. https://home.treasury.gov/news/press-releases/sm661

U.S. Department of Treasury. Treasury Sanctions Venezuela’s State-Owned Oil Company Petroleos de Venezuela, S.A. U.S. Department of the Treasury. January 28, 2019b. https://home.treasury.gov/news/press-releases/sm594

U.S. Department of Treasury. Treasury Sanctions Venezuela’s State Gold Mining Company and its President for Propping Up Illegitimate Maduro Regime. U.S. Department of the Treasury. March 19, 2019c. https://home.treasury.gov/news/press-releases/sm631