Chapter 5 of Public Choice Theory and the Illusion of Grand Strategy taught me the most.  Hanania provides a great survey of what we know about the effects of trade sanctions – and then gets meta.

He starts by emphasizing the terrible harm of sanctions.  “Humanitarian” exceptions mean little in practice:

Sanctions regimes that target the economy of a country usually have humanitarian exceptions. Despite this, other regulations usually serve to limit their effectiveness. For example, federal law prohibits the president from implementing sanctions on Iran that involve “the sale of agricultural commodities, food, medicine, or medical devices …” (22 U.S.C. § 8806(c)). Still, sanctions related to the financial sector and other parts of the economy work to nullify these exemptions. To see why, imagine an American company that tried to trade in food or medicine but did not have access to banking services, such as the ability to take out loans or accept credit cards ( Cullis and Handjani 2019 ). Compounding the problem is the fact that Iran is a largely state- run economy, which makes it diffi cult to do business there while completely avoiding the government sector. Even when one can potentially operate within the letter of the law, the sanctions regime is of such complexity, and the potential consequences of running afoul of US law so dire, that there is a chilling effect on many businesses ( Cunningham 2018 ).

The idea that sanctions will lead to regime change is silly wishful thinking:

Politicians who support sanctions typically argue that economic pressure can help propel major changes in policy, perhaps even regime change. Occasionally, American leaders spell out precisely how this is supposed to happen. They sometimes argue that by hurting the economy of the targeted country, the people will become fed up, blame the regime for their problems, and get rid of it. Secretary of State Mike Pompeo, for example, predicted that the Trump administration’s “maximum pressure” campaign against Iran “will lead the Iranian people to rise up and change the behavior of the regime” ( Harb 2019 ). Sometimes policymakers expect regime elites, rather than regular citizens, to rise up against the government. The Trump administration sanctioned Venezuela beginning in 2017 in the hopes that military leaders would overthrow President Nicolás Maduro ( Wyss, Ordoñez, and Torres 2018 ; Cohen, Spetalnick, and Rampton 2019 ). Proponents of sanctions also occasionally expect that the process of starving the targeted government of resources will lead to regime change. Thus, after the Obama administration placed sanctions on the Syrian government in August 2011, then Secretary of State Hillary Clinton assured the American public that the new measures would “strike at the heart of the regime” by making it unable to fund its security forces ( Wilson and Warrick 2011 ).

Each one of these theories about how sanctions lead to regime change or major policy shifts has serious theoretical flaws. First of all, even if citizens living under tyranny and economic deprivation dislike their government, they still face a collective action problem in overthrowing it ( Olson 1971 ). Regime elites, almost by definition, benefit from the current system, so even if they face less of a collective action problem, they usually should not be expected to take major risks in order to bring down their government. Furthermore, there is little reason to expect any government to simply run out of money to pay its security forces. A regime facing an internal threat should prioritize security above all else. While international arms races are expensive, domestic repression is cheap, with governments having been known to even compensate private militias by allowing them to loot civilians and enemies of the regime ( Steinert, Steinert, and Carey 2019 ).

Sanctions policy, too, is incoherent:

[P]olicymakers show little interest in actually using the leverage that sanctions give them to achieve foreign policy goals. If the instrumental explanation of sanctions is correct, then the United States should, at the very least, talk to targeted regimes in order to make its demands clear and provide a clear path toward the removal of restrictions on trade. Yet American administrations have done the opposite, in certain cases both demanding the impossible from their adversaries and cutting off all contact.

So why do sanctions exist?  Action Bias!  Something must be done, this is something, therefore this must be done.

Political psychology can explain the appeal of sanctions. A leader who engages in an unpopular foreign intervention can see his presidency destroyed. That happened during the presidencies of Lyndon Baines Johnson, who decided not to run again when facing pressure over his policies in Vietnam, and George W. Bush, who, although he won reelection, saw Iraq contribute to the collapse of his approval ratings during his second term and damage the electoral prospects of his party. At the same time, there is often domestic pressure to “do something” about human rights violations and cases of military aggression. Sanctions can thus appear to be a moderate and measured response to unacceptable behavior abroad. British diplomat Jeremy Greenstock was expressing a common frustration when he said that “there is nothing else between words and military action if you want to bring pressure upon a government” ( Marcus 2010 ).

Sanctions are an “easy” option because the death and destruction that they cause are unlikely to stir large- scale domestic opposition.

The War on Terror has also been incoherent:

Throughout American policy toward the region, we see much stronger evidence for the public choice perspective. The Afghanistan papers reveal uncertainty about the mission at the highest levels of government, generally matching what we see in memoirs and other first-hand accounts of what happened… In Iraq, I show that the decision to go to war was based on the victory of one bureaucratic faction over the other. The lack of planning for the postwar aftermath can be explained in part by the fact that the hawkish faction, centered around the Pentagon and the Office of the Vice President, did not believe in nation- building. Yet after Saddam was removed, President Bush adopted the views of what had been the anti-war faction, which involved a rejection of the exiles championed by the war hawks and a more long- term strategy oriented toward creating a democratic Iraq with new leaders. President Bush, who worked with dedication on a year-long campaign to bring the country into war, made the most important decisions about the postwar planning at the latest date possible and with the most careless indifference. While the Iraq War was sold as a preemptive strike that would protect Americans from direct attack, it became a humanitarian intervention based on an ad hoc theory that forced democratization was achievable, that it would have a domino effect, and eventually end terrorism. This was due to the embarrassment over the lack of WMDs and connections between Saddam Hussein and al-Qaida that became apparent not long after the occupation began. The freedom agenda was born because it was the only way that the Bush administration could justify a continuing occupation, which was necessary because pulling out would have been interpreted as an embarrassing defeat.

Culpable negligence abounds:

We fi nd that the origins of both Iraq and Afghanistan follow a pattern. In each case, the United States ostensibly wanted something – bringing al- Qaida to justice in Afghanistan and verification of disarmament in the case of Iraq – but did not seriously consider ways to achieve those ends short of war. Once it conquered the targeted country, American behavior appears to have had little to do with the original justification for war. The United States could have stayed narrowly focused on terrorism in Afghanistan, as it has when striking countries like Somalia and Yemen, and it could have removed Saddam Hussein and then left, putting into power the Iraqi National Congress or even keeping the old regime intact with a new president. In both cases, top American officials made or delegated key decisions about their postwar policy with little thought given to the issues involved.

Why is there so much culpable negligence?

The simplest explanation for why the United States went into Iraq and Afghanistan and removed the governments of those states is that there were psychological and political incentives to engage in regime change. War in response to terrorism was good politics; it also soothed any wounded pride that officials had.

Putting U.S. defeats in economic perspective:

Most scholars who write on the topic widely acknowledge that it was a mistake to go into Vietnam and Iraq, and that even if the war in Afghanistan was originally justified, the mission was too ambitious and went on for too long. Yet the field has not yet come to terms with the magnitude of these failures. In each of these countries, the United States has tried to secure a nation by spending many times what that country produces in a given year. Comparing what these countries produced before American troops arrived to what the United States has sacrificed, even setting aside the number of lives lost, the money spent to GDP ratio has been 74:1 in South Vietnam, 43.3:1 in Iraq, and a stunning 396:1 in Afghanistan. In other words, the United States has spent in Afghanistan the equivalent of that country’s level of production, assuming it stayed constant, for close to four centuries. While scholars will acknowledge that American foreign policy has had serious failures, they have yet to grapple with what these conflicts mean for the rational actor model, in which foreign policy is said to be based on some kind of cost– benefit analysis and serve the national interest.

If only the U.S. responded to humanitarian disasters by welcoming refugees instead of sending soldiers.  Helps far more, costs far less, with near-zero collateral damage.

The book ends by grappling with public choice fatalism – though by this point I did find it hard to retain any optimism.