The Trouble With Economic Sanctions.

• Author: Ullmann, Owen

A powerful weapon but a dumb one.

In the summer of 1941, the U.S. government ordered a ban on oil exports to imperial Japan, the latest in a series of economic sanctions it had imposed in response to Japan's expansion throughout Asia. If the goal of the embargo was to deter such aggressive moves, it obviously failed. A few months later, as we all know, Japan attacked Pearl Harbor, officially drawing the United States into World War II.

That's a valuable history lesson for the Biden administration to master as it oversees the most extensive set of economic sanctions ever coordinated against a major military and economic power in hopes of making Russia think twice about its unprovoked war against Ukraine.

Economic sanctions are a powerful weapon but a dumb one, to use a military analogy. Unlike high-tech precision armaments that can seek out the most obscure target and score a direct hit, sanctions are blunt tools for conducting foreign policy. They have a mixed record of producing a change in regimes or policies. They are almost never airtight--the target of the sanctions usually can find loopholes to reduce the harsh penalties. And even when effective, they take a long time to produce the desired results, often years.

That's not to say they shouldn't have been imposed against Russian President Vladimir Putin for ordering an attack on a neighboring sovereign nation that had been at peace. He should pay a heavy price for his evil venture. And his country will suffer, though the West may not see tangible evidence for many, many months because of Russia's maneuvering to keep massive revenue flowing into its coffers from energy exports and its moves to shield data on the true state of its economy.

The ruble, which crashed when Western sanctions first were enacted, has recovered in response to stringent capital controls imposed by Putin's government. Life appears normal for average Russians, even after many foreign companies pulled out and imports were cut off. Inflation is rising and the consensus forecast is that Russia will plunge into a recession next year. No one knows how steep it might be or whether the continuation of sanctions, like a slowly tightening vise, will prompt the Russian people to turn against the war and Putin. For now, both Russia's president and his "special military operation" are enjoying broad public support.

Owen Ullmann is TIE's executive editor and author of 'Empathy Economics, a biography of Treasury Secretary Janet Yellen to be published in fall 2022.

Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics in Washington, has studied several hundred cases of sanctions for decades and concludes that they are much more effective as a form of punishment than as a tool for reversing a nation's...