National Interests: Priorities and Security
 

Sanctions and counter-sanctions: The use of political tools for economic purposes

Vol. 13, Iss. 8, AUGUST 2017

Received: 26 June 2017

Received in revised form: 19 July 2017

Accepted: 11 August 2017

Available online: 29 August 2017

Subject Heading: ECONOMIC POLICY OF THE STATE

JEL Classification: E61, E65, F51, F52, F62

Pages: 1396–1414

https://doi.org/10.24891/ni.13.8.1396

Lyakin A.N. Saint Petersburg State University, St. Petersburg, Russian Federation a.lyakin@spbu.ru

Rogov M.I. Saint Petersburg State University, St. Petersburg, Russian Federation mikhail.i.rogov@gmail.com

Importance This article reviews discriminatory measures of the Western countries against Russia and Russia’s reciprocal response as protectionism for attaining economic goals of the countries initiating the restrictions.
Objectives The research specifies the existing terminology, demonstrate that sanctions can be imposed only by the supranational organization that has respective authority in relation to its members. We also analyze benefits and losses of the discriminatory measures.
Methods Embargo and financial restrictions against Russia are viewed as extreme forms of the competition among national economies. We suggest evaluating the effectiveness of commodity and capital restrictions by comparing benefits and losses from them for the national economy, rather than the assessment of losses for counterparties. We applied methods of logic and statistical analysis, including graphic visualization.
Results Having analyzed the outcome of Russia’s protectionist measures to restrict the competition in agriculture, we found that sectors with a short pay-back period saw a rapid growth in production, and replaced imported goods. Sectors that need substantial investment rearranged the geography of supplies.
Conclusions and Relevance In the short run, the boycott appears more effective than embargo, since it pushes a growth in industries covered with a protectionist shield, while the embargo can be circumvented with a variety of trading ties in the global economy. In the long run, the boycott will not have an adverse effect on the competitiveness of the protected sectors, while the embargo impedes an economic growth and effective development of the sectors suffering the restrictions.

Keywords: embargo, boycott, protectionism, Russian economy, sanctions

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