LIT6: Chowdhry, S., Felbermayr, G., Hinz, J., Kamin, K., Jacobs, A. K., & Mahlkow, H. (2020). The economic costs of war by other means

Question 1

What is the “War by Other Means”?

Answer 1

The ‘ War by Other Means’ theory put forward by Blackwill and Harris (2016) argues that military effort and economic sanctions are strategic substitutes.

If this is indeed the case, then the extent of a country’s contribution towards
collective security does also depend on the financial burden of economic sanctions.

Question 2

Who have the financial burden of sanctions imposed by NATO?

Answer 2

European countries bear a much higher cost of sanctions than the US, relative to their respective GDP values.

Question 3

What is the goal of sanctions?

Chowdhry

Answer 3

Economic sanctions seek to deter countries from pursuing policies that may violate international law or threaten peace and risk national security, both in the target as well as in the sanction sending country.

Instead of (or in addition to) military intervention, countries can adopt measures that target the sanctioned country’s economy through a wide range of restrictions such as on trade flows, financial transactions, travel and military assistance.

Question 4

Who carry the cost of sanctions? Chowdhry?

Answer 4

Sanctions impose these costs not only on the targeted nations but also
on the sanctioning (the “sender”) and third party countries.

Question 5

When are the costs of sanctions amplified?

Answer 5

1. Sanctions are poorly targeted leading to collateral damage, e.g., declining
   trade even in nontargeted products.
2. In the presence of global value chains if firms’ production processes rely on
   inputs from the sanctioned nation.