Anton Filipenko

  Olena Bazhenova

  Roman Stakanov


The purpose of the article is to analyze the theory and practice of international economic sanctions. The application of international economic sanctions and debate about their effectiveness and scale of losses are now at the centre of international politics. Analysis of key factors, mechanisms and socio-economic consequences of economic sanctions in the world economy need a conceptual understanding. The subject of the research is international economic sanctions. According to known practice, economic sanctions policy is based largely on the discretionary approach of using, as required, a policy of rigid rules, which is clearly reflected in the mechanisms, means and instruments of its practical implementation. Economic sanctions are the integral part of international economic policy, implemented through the theory of public (rational) choice, structural theory (cost-issue model), decision-making theory, the theory of coordination and cooperative games, etc. The hierarchical nature of the mechanism for the application of sanctions is available in three main levels: global, regional and national. There are three types of economic sanctions: trade, investment or financial ones, and so-called targeted sanctions or “smart” sanctions (transportation and communications restrictions). The case of introduction of economic sanctions, especially by supranational bodies of international integration organisations, namely the EU, is of particular importance for economic policy coordination. The specific consequences of imposing economic sanctions take on various socio-economic dimensions, the main ones of them indeed being the economic growth rates. The economic sanctions demonstrate how the individual countries, regional and international organizations react on huge violations of human rights, sovereignty of countries, international law in general. Methodological basis of the research comprise the list of theoretical and empirical methods of research; in article, the analysis of recent research publications subject under the discussion has been provided, the results obtaining with statistical data have been compared, the practical recommendations, received on the base of survey results have been suggested. To examine how the Iranian economy responds to sanctions imposed by the US and other countries we have constructed vector autoregression model. To test the variables of the model for unit root we have used augmented Dickey-Fuller, Phillips-Perron and Kwiatkowski–Phillips–Schmidt–Shin criteria, which have shown that almost half of the indicators are first-order integrated, with the rate of inflation and investment, in relation to GDP, GDP growth rate, imports of goods and services and oil rent are stationary, that is zero-order integrated. The US sanctions have increased oil price fluctuations in the Middle East region. The results of the study have shown that economic sanctions nowadays are a comprehensive tool in global economic wars, which effectiveness largely depends on the ratio of the economic power of the sanction imposing country to the sanctioned one.

How to Cite

Filipenko, A., Bazhenova, O., & Stakanov, R. (2020). ECONOMIC SANCTIONS: THEORY, POLICY, MECHANISMS. Baltic Journal of Economic Studies, 6(2), 69-80.
Article views: 74 | PDF Downloads: 63



economic sanctions, world economy, GDP, USA, Iran


Polanyi, K. (2002). The great transformation. The political and economic origins of our time. Transltader from English. St. Petersburg.

Keizer, P. (2015). Multidisciplinary economics. A methodological account. Oxford University Press.

Dhami, S. (2016). The foundations of behavioral economic analysis. Oxford University Press.

Kaempfer, H. W., & Lowenberg, A. D. (1988). The theory of international economic sanctions: the public choice approach. The American Economic Review. Vol. 78, No. 4 Sep.

Hashimzade, N., & Thornton, M. A. (2013). Handbook of research methods and applications in empirical macroeconomics. Edward Elgar, Cheltenham.

Leontief, V. V. (2006). Selected works in three volumes. Vol. ІІІ. Translation from English. Moscow.

United Nations (2020). Charter of the United Nations. Retrieved from: (accessed January 23, 2020).

Giumelli, F. (2013). How EU sanctions work: A new narrative. Retrieved from: (accessed January 23, 2020).

Verkhovna Rada (2020). The Law of Ukraine on Sanctions. Retrieved from: (accessed January 23, 2020).

The World Bank (2020). World Development Indicators. Retrieved from: (accessed January 23, 2020).

International Monetary Fund (2020a). International Financial Statistics. Retrieved from: (accessed January 23, 2020).

Internatonal Monetary Fund (2020b). Primary Commodity Prices. Retrieved from: (accessed January 23, 2020).

Eucken, W. (1952). Grundsätze der Wirtschaftspolitik. Tübingen.

Tinbergen, J. (1956). Economic Policy: Principles and Design. Amsterdam.

Boulding, K. E. (1958). Principles of Economic Policy. Englewood.

Economides, S., & Wilson, P. (2001). The Economic Factor in International Relations / L. ; N. Y.: I. B. Tauris Publishers.

Hufbauer, G. C., Schott, J. J., Elliott, K. A., & Oegg, B. (2007). Economic Sanctions Reconsidered / 3rd ed. Washington, D. C.: Peterson Institution for International Economics.

Cronin, P. M. (2009). Strategic Assessment 2009: America's Security Role in a Changing World / Washington, D. C.: Institute for National Strategic Studies, National Defense University Press.

Frank, J. (2017). The Empirical Consequences of Trade Sanctions for Directly and Indirectly Affected Countries : FIW Working Paper № 174 / Vienna.

Büthe, T. (2009). Lecture 15. Wielding Economic Power: Economic Sanctions & Foreign Aid: Duke University PS 93 Guest Lecture. Retrieved from: (accessed January 23, 2020).

Afesorgbor, S. K. (2016). The Impact of Economic Sanctions on Income Inequality of Target States: Economics Working Papers 2016-4.

Baluev, D. (2014). The evolution of economic sanctions as an instrument of foreign policy. International processes. Vol. 12, № 3, pp. 23–33.

Pape, R. A. (1997). Why Economic Sanctions Do Not Work. International Security. Vol. 22, № 2, pp. 90–136.

Kunz, D. B. (1994). When Money Counts and Doesn't. Diplomatic History. Vol. 18, № 4, pp. 451–462.