Smooth Talking The Case for Easing Sanctions on Iran

By Kimberly Ann Elliott
As negotiations over Iran’s nuclear program resume in Geneva this week, 
observers and policymakers are sharply divided on the role of economic 
sanctions. Those who want to give negotiations a chance, including U.S. 
President Barack Obama and Secretary of State John Kerry, believe that the 
United States and its allies should be willing to ease sanctions in 
exchange for Iranian cooperation. Those who remain suspicious of Iran’s 
intentions, including many in Congress, maintain that the United States 
should double down on sanctions to force Iran to comply with its demands.
History suggests that once imposed, the promise to lift sanctions often 
offers more leverage than efforts to keep them from leaking. To be sure, 
there is no question that the sting of economic sanctions contributed to 
Iranian President Hassan Rouhani’s recent charm offensive. But sanctions 
were hardly the sole reason he came to the table: The window for 
negotiations opened only after Mahmoud Ahmadinejad, a president who Iran’s 
supreme leader, Ayatollah Ali Khamenei, no longer trusted, was replaced by 
someone he does -- at least for now. Domestic politics in Iran and the 
United States will determine whether that window stays open or slams shut 
once more. To keep it open, Rouhani will have to show his audience at home 
that he can win some relief. And in the United States, Congress will have 
to allow Obama sufficient flexibility to use sanctions as the bargaining 
chip they are.
Throughout history, sanctions have rarely caused countries to capitulate 
outright. Colleagues from the Peterson Institute for International 
Economics and I analyzed 204 instances of sanctions in the twentieth 
century (all the cases we could identify). We found that they achieved 
part of their goals about a third of the time. Indeed, most of the 
successful examples involved compromise and partial accomplishments. Only 
in 12 cases did sanctions lead directly to their intended results.
Overall, we concluded, sanctions were most likely to be effective when the 
sanctioner’s goals were relatively modest, the targeted government was at 
least somewhat democratic, relations between the sanctioning and target 
governments were friendly rather than hostile prior to sanctions being 
imposed, and the economic costs imposed on the target were proportionate 
to the goal sought. Finally, when sanctions were carried out with 
ambitious objectives, success depended on international cooperation from 
allies or international organizations.
Unfortunately for Washington, the Iran case does not meet the first three 
conditions. The goal, suspension of Iran’s nuclear program, involves a 
core national security concern for Tehran. Further, Iran is only nominally 
democratic. Iranians vote -- but only for candidates the Supreme Leader 
and Guardian Council approve. Finally, relations between Iran and the 
United States, and increasingly between Iran and much of the rest of the 
world, are hostile.
Balancing against that, though, is the unusual degree of international 
cooperation that the United States has corralled to impose and enforce 
economic sanctions. A Congressional Research Service report estimates that 
sanctions have halved Iranian oil exports, which once accounted for as 
much as 80 percent of the country’s exports, 50 percent of the 
government’s revenues, and 20 percent of the economy.By our conservative 
estimates, the sanctions cost Iran at least 5.5 percent of its GNP once 
the EU oil boycott was fully implemented. That is a higher toll than in 
all but 28 of the 204 cases we surveyed. It is also in line with the 
average cost to targeted countries in cases where the goals were very 
ambitious and sanctions contributed to positive results, including, for 
example, the extensive UN sanctions against the former Yugoslavia that led 
to the signing of the Dayton Peace Accords and the end of the Bosnian 
conflict in the 1990s.
High economic costs, however, are no guarantee of political results. The 
cost of sanctions for Iraq in the 1990s was ten times as high as for Iran 
today, yet that sanctions regime was inadequate to force Saddam from 
power, as some had hoped, or coerce his cooperation in the UN-led effort 
to find and destroy Iraq’s weapons of mass destruction. Moreover, the 
severe humanitarian impact of the sanctions, which were the most globally 
comprehensive ever, eroded political support for the tough approach and 
thus undermined the United Nations’ ability to enforce it.
The backlash against the sanctions in Iraq also led the United Nations, 
the United States, and the European Union to shift focus toward more 
narrowly defined sanctions, such as arms embargoes, travel bans, and asset 
freezes, all of which target officials, not regular citizens. This type of 
sanction, a wealth of evidence shows, is more effective as a signal during 
later negotiations than as a means to coerce major behavior changes. 
Sometimes, of course, sanctioners’ goals are ambitious and require just 
such change. In those cases, sanctioning countries feel pressed to ratchet 
up the pressure, as in Iran. And then, they must strike a tricky balance 
between sanctions that get the target’s attention and those that are so 
harmful to ordinary citizens that they become unsustainable.
Those in Washington who are pushing for tighter sanctions are working 
against recent trends. They want to cut off Iranian energy exports and 
thus bring the economy to its knees. Ordinary Iranian citizens could not 
possibly escape unscathed. And the Iranian government is already trying to 
build international humanitarian concern by publicizing the impact of 
sanctions on food prices and access to medicines. As in Iraq, pictures of 
hungry children and the deathly ill will undermine political support for 
sanctions, erode enforcement, and increase the pressure to lift sanctions.
A related problem is that U.S. sanctions already cover all trade and 
financial transactions (with the exception of humanitarian items). In 
other words, U.S. policymakers can put more pressure on Iran only by 
coercing third parties to either forgo business with Iran or risk losing 
access to the U.S. financial market. If Congress continues to push for 
sanctions against allies and other parties that still import oil from 
Iran, as is currently permitted by UN Security Council resolutions, it 
could make the European Union and others simply stop cooperating.
For now, those who continue to oppose pursuing a negotiated solution argue 
that the talks will allow Iran to buy time and continue developing its 
nuclear capability. But their alternative, more sanctions, would also take 
time to work. And with talks moving forward, trying to use them to bring 
the country to its knees will simply increase the odds that the world will 
end up having to contain a nuclear Iran.
Negotiations with Iran will not be easy, and an acceptable compromise may 
be out of reach. But the possibility of easing sanctions has to be on the 
table for there to be any chance of success. Congressional action to deny 
the president that option or pile on more sanctions will likely make the 
Iranian regime feel more threatened and more convinced that a nuclear 
weapon is necessary for its security. The current sanctions against Iran 
helped open the window for a diplomatic resolution. The question now is 
whether the United States and its allies will pry the window wider or slam 
it shut on their own fingers.