Sanctions: When Politics Shapes the Economy
Economic sanctions are one of the main ways governments try to influence other states without using military force. By restricting trade, finance, or access to resources, sanctions aim to pressure governments to change their behaviour. However, sanctions also have major effects on businesses and global markets.
In recent years, sanctions have expanded dramatically, particularly in relation to energy, banking, and technology. These measures often reflect political objectives, such as punishing aggression or protecting national security. However, they can also cause unintended consequences, including higher energy prices and supply shortages.
From a political perspective, sanctions raise important questions. Do they actually change state behaviour, or do they harm ordinary people more than governments? And should economic tools be used to enforce moral or political values?
For businesses, sanctions create risk. Companies must constantly check whether they are allowed to trade with certain countries or individuals. A deal that seems profitable may suddenly become illegal due to a change in foreign policy. This shows how political decisions directly affect commercial strategy.
Sanctions also demonstrate how power operates in the global system. States with strong economies can impose sanctions more effectively, while smaller states often have little choice but to comply. This reinforces existing inequalities in international relations.
For students, sanctions are a useful case study in how politics, law, and economics overlap. They reveal how governments use economic pressure to achieve political goals, and how businesses are forced to adapt to a world where politics can change the rules overnight.