The impact of economic sanctions on income inequality of target states

Abstract

In this paper, we draw on established theoretical work to analyze empirically which segments of the population in the target states bear the most cost when economic sanctions are imposed. Using a crosscountry analysis of 68 target states from 1960 to 2008, we find robust empirical evidence that the imposition of sanctions has a deleterious effect on income inequality. Focusing on various sanction instruments, financial and trade sanctions were found to have different impacts on income inequality. Lastly, the adverse effect of the sanctions is more severe when sanctions span longer durations.