AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
How Should Sanctions Account for Bystander Countries?
AEA Papers and Proceedings
(pp. 39–42)
Abstract
Neutral "bystander countries" have profoundly shaped the impact of trade sanctions imposed on Russia following its invasion of Ukraine. How should sanctions account for the presence of such bystanders? I study this question in a simple trade model where a sanctioning country places tariffs on imports from a sanctioned country in the presence of a neutral third country. Optimal tariffs-as-sanctions are lower on goods that the sanctioner can import from bystanders. On goods that the sanctionee can export to bystanders, tariffs-as-sanctions are higher given an elasticity of (excess) supply to the sanctioner but lower given a total elasticity of supply.Citation
Sturm, John. 2023. "How Should Sanctions Account for Bystander Countries?" AEA Papers and Proceedings 113: 39–42. DOI: 10.1257/pandp.20231044Additional Materials
JEL Classification
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 Trade Policy; International Trade Organizations
- F51 International Conflicts; Negotiations; Sanctions