Economic coercion often fails to deliver desired policy concessions. Bryan Early’s book starts with this well-established empirical finding in sanctions research, and then focuses on one factor that contributes to sanctions’ high failure rate: third-party states’ behavior during sanctions. When a sender government imposes sanctions against a target state, third-party states can choose to engage in sanctions busting, that is, exploit trade opportunities created by the sender’s restricted exchanges with the target, or provide the target with foreign aid to compensate for some of the losses resulting from trade restrictions. The puzzle is why third-party states may seek to undermine the sender’s sanctioning effort, and why they opt for trade-based sanctions busting in some cases and disburse foreign aid in others. The key contribution of Busted Sanctions is threefold: The book offers a comprehensive examination of sanctions busting, identifies conditions when third-party states will use trade-based and aid-based sanctions-busting strategies, and gauges the detrimental effect of sanctions busting on outcomes of economic coercion.
The author’s argument highlights the nexus between domestic and international politics in third-party states’ decision to engage in sanctions busting. Building on previous research, which shows that sender-imposed trade restrictions can generate lucrative commercial opportunities for third-party firms, Early points out that such domestic economic benefits of sanctions busting combine with third-party governments’ political interest in supporting or undercutting economic sanctions. For instance, a rivalry with the sender state or ideological affinity with the target state may incentivize third-party states to offer assistance to the target, even when economic benefits are absent. In addition, the interest in assisting the target can be tempered by third-party governments’ resource constraints: When commercial opportunities are largely absent, aiding the target requires disbursements of foreign aid, which can be a significant drain on third-party governments’ resources. Hence, the theoretical framework incorporates these elements of third-party states’ decision making into a coherent argument, which then produces a number of testable predictions. Early anticipates trade-based sanctions busting to be rampant whenever firms can generate sizable profits from their sanctions-busting trade, and when their governments do not fear repercussions for allowing such trade exchanges. For U.S. sanctions, Early suggests, such sanctions busters are most likely to be “fellow democracies with which it is allied that also possess large, globalized economies” (p. 143). Another theoretical conclusion concerns third-party countries’ aid giving: Aid-based sanctions busters lack domestic profit-driven interest in trading with the target, but such governments view the sender as their ideological or great-power rival and have adequate government resources to undermine the sender’s sanctioning effort.
To evaluate these theoretical expectations, Early uses a two-prong approach that combines detailed case studies and empirical tests. The quantitative and qualitative analyses included in the book are valuable for different reasons. The former allows the researcher to conduct a rigorous test of his hypotheses and gauge the relative importance of different determinants of sanctions-busting behavior. For instance, third-party states’ economic size emerges as a particularly prominent factor contributing to trade-based sanctions busting (p. 153). Qualitative evidence complements the results of quantitative tests by probing the plausibility of proposed causal links. Early studies two sanctions episodes: The first traces development of a trade-based sanctions-busting relationship between the United Arab Emirates (UAE) and Iran during the period of U.S. sanctions against Iran; and the second applies the method of “structured, focused comparison” in order to examine the evolution of Cuba’s relations with third-party states, such as the USSR, China, and Venezuela, which engaged in aid-based sanctions busting during different periods of U.S. sanctions against Cuba (p. 160).
Aside from offering very rich and nuanced accounts of the two sanctions episodes and sanctions-busting strategies pursued by third-party states, the case studies yield compelling evidence in support of the proposed causal mechanism. The UAE’s striking defiance of the U.S. sanctions regime against Iran is attributed to powerful economic interests that existed at the domestic level, and the government’s confidence that its alliance with the United States would shield the government from any potential ramifications from undermining U.S. coercive efforts. This case aligns well with Early’s theoretical expectation: “The UAE’s sanctions busting deliberately undercut its most important ally’s sanctions against a regional rival that both countries perceived as a threat” (p. 140). The case also emphasizes the role that domestic economic interests can play in third-party states’ behavior. The second case study is similarly consistent with predictions derived from the theoretical framework. The third-party states that offered extensive foreign aid to Cuba shared three characteristics: They had adversarial relationships with the United States; they could not rely on a trade-based sanctions-busting strategy due to the state of Cuba’s economy; and they were in a position to offer financial assistance for a period of time. The only case that stands out is post–Cold War China, which combined foreign aid with trade as sanctions-busting methods, leading Early to conclude that the two approaches are not mutually exclusive.
The empirical contribution of the book extends beyond the analysis of sanctions-busting behavior. It also presents results that evaluate the effect of this behavior on sanctions outcomes. An important conclusion that Early draws from these empirical models is that “although adverse effects of aid-based sanctions busters can be mitigated, the deleterious impact of trade-based sanctions busters rarely can be” (p. 15).
While the book offers a compelling and systematic account of the politics of sanctions busting, it does not take full advantage of the opportunity to present a more complete picture of third-party states’ role in undermining economic sanctions. Specifically, the argument presented in Busted Sanctions primarily considers overt sanctions busting, but third-party states can also undercut sanctions covertly. Illicit trade as a sanctions-busting strategy is mentioned very briefly and mainly as a way of explaining an otherwise counterintuitive result: Third-party states that share borders with target states are less likely to engage in trade-based sanctions busting. Early suggests that instead of indicating cooperation with the sender’s sanctions, this result means that “the neighbors of target states conduct a notable amount of their sanctions-busting trade via smuggling and unrecorded trade” (p. 153). This interpretation opens the possibility that at least some of Early’s other empirical findings may indicate third-party states’ choice to undermine sanctions covertly, rather than avoid sanctions busting altogether. For instance, one empirical finding points to a positive association between third-party states’ economic size and their propensity to resort to trade-based sanctions busting. While it may appear that smaller economies are less likely to engage in sanctions busting, the alternative explanation could be that such third-party states are less likely to rely on overt sanctions busting, preferring a covert strategy instead.
Without an explicit discussion of overt and covert sanctions busting, the book could be overlooking a significant share of sanctions-busting behavior, which would mean that sanctions busting is even more rampant than this research finds. Despite this shortcoming, the book is an important addition to the research on economic coercion, with findings that are highly relevant for foreign policymaking.
