Sanctions and international institutions: How to reduce sanction risks for Russia?

Abstract

In recent years, the global economy has faced a remarkable increase in non-cooperative practices in trade regulation. An important contribution to this trend has been made by the use of economic sanctions. The doctrine of smart sanctions based on political economy arguments has radically changed the role of sanction-related issues on the agenda of international institutions. First, smart sanctions are now considered to be a substitute for war, rather than its precursor. Second, more countries practice sanctions without the approval of the United Nations (UN) Security Council or complement UN sanctions with additional measures of their own. Third, control mechanisms to prevent shirking in sanctions coalitions have become much more difficult to design. Fourth, smart sanctions appear to be optimal in situations when particular countries cannot stand aside but also have no intention of significantly harming their economic relations with target countries. In general, these novelties have created incentives for increased use of economic sanctions and the creation of more sophisticated control mechanisms to prevent sanctions evasion. At the same time, international institutions play a lesser role in preventing escalation of sanctions. An increasing number of sanctions initiatives are launched and implemented outside the legal framework of the UN Security Council, and as the World Trade Organization (WTO) is distancing itself from addressing trade barriers associated with sanction regimes, most target countries are forced to run the sanctions race "by one and one and never by two and two. "