- 期刊
- OpenAccess
Cost-Benefit Analysis of International Sanctions: Case Study of the JCPOA and US Maximum Pressure Policy towards Iran
摘要
US-Iran relations have been increasingly hostile since 1979 when a group of Iranian students attacked the US embassy in Tehran and took several US citizens hostage. In response to this action, which was in the heat of the revolution and not well thought plan, Jimmy Carter, the United States' president at the time, imposed a sanction on Iran and froze more than USD 8 billion of Iranian assets including bank deposits, gold and other properties as well as a trade embargo. This was the beginning of a long list of sanctions which were forced upon Iran over the following years for several reasons including violation of human rights and development of nuclear weapons. These sanctions continued to pile up until July 14, 2015 and the signing of the Joint Comprehensive Plan Of Action (JCPOA) in Vienna when the world powers agreed to lift the sanctions on Iran, if Iran agrees to demote its nuclear activities to a predefined maximum. However, with the election of the new US president, Donald Trump, the United States left the agreement and enforced new sanctions on Iran as well as reenforcing the old ones. Policy makers usually see sanctions as a preferable option to war because it does not involve military action; thus, reducing huge casualties. However, many cases have shown that sanctions did not force the target states to alter their policies, such as Cuba, Iraq and North Korea. Like any other policy, sanctioning a country has costs for both the imposer and the target of the sanctions; least of which being the changes in the market for the products the target country supplies. Furthermore, sanctions could affect the civilian citizens of the target country negatively. In short, sanctions have costs as well as benefits and they are preferable only if the difference between the two is positive towards the benefits. Most of the existing literature have analyzed this balance through the lens of a qualitative analysis. In this study, however, we wish to do so by applying two quantitative methods. First, we will show the balance between the costs and benefits of sanctioning Iran through a cost-benefit matrix based on Iran's Annual National Accounts. Furthermore, using a Difference-in- Difference model with the data from Iran's Household Income-Expenditure Survey we wish to estimate the effectiveness of the sanctions imposed on Iran in order to prevent its government from violating human rights and pursuing nuclear weapons. Based on our primary findings, the sanctions imposed on Iran, worsened the living conditions for its citizens while having no meaningful effects on its military expenditures.