The Impact of UN and US Economic Sanctions on the Misery Index of Targeted Countries

Ashraf Ganjoui, Reza; Iranmanesh, Saeed

doi:10.22054/ijer.2022.67022.1088

Journals List

The Journal of Public Service Management Studies Achieves a "Grade B" Rating in the 2023 Evaluation

Official Announcement of the "Guidelines for the Responsible Use of Artificial Intelligence in Research"

Achieving the "A" rank for the "Shi'a Comparative Theology" biannual journal in the 1403 (2024/2025) assessment

New Policy for Use of Artificial Intelligence in Publications of Allameh Tabataba'i University Announced

Obtaining a ranking by the journal of education leadership research from the Ministry of Science, Research and Technology

Obtaining the "A" rating by the Quranic Knowledge Research Journal from the Ministry of Science, Research and Technology

Consultative meeting of officials of scientific journals of Allameh Tabatabai University

The scientific evaluation results of the journals of Allameh Tabataba'i University in the year 1401; 18 titles succeeded in obtaining an "A" rank.

	The Impact of UN and US Economic Sanctions on the Misery Index of Targeted Countries
پژوهش‌های اقتصادی ایران
Article 7, Volume 28, Issue 94, April 2023, Pages 281-323 PDF (1.33 M)
Document Type: Research Paper
DOI: 10.22054/ijer.2022.67022.1088
Authors
Reza Ashraf Ganjoui^* ¹; Saeed Iranmanesh²
¹Assistant Professor of Economics, Department of Economic Sciences, Faculty of Economics and Management, Sistan and Baluchestan University, Zahedan, Iran
²Assistant Professor of Department of Economics and Accounting, faculty of Management, Economics and Accounting, University of Hormozgan , Bandar Abbas, Iran
Abstract
In recent decades, international sanctions have become a recurring feature in political interactions between some governments. The United States has imposed the most economic sanctions since World War II. Also, several actions have been taken by the United Nations in recent years. In this study, the effect of economic sanctions of the United Nations and the United States on the misery index during the years 1991-2020 has been investigated by using the generalized least squares (GLS) method. The results indicate that the United Nations and United States sanctions have a significant effect on the misery index. On average, the imposition of sanctions by the United Nations and the United States have increased the misery index of the target country by 8.12 and 6.49, respectively. Also, the positive and increasing effect caused by the application of comprehensive economic sanctions of the United Nations on the misery index is more than the sanctions of the United States. Introduction Before the First World War, the countries with high military and economic power used the only means available to implement their desired policies in the target countries through war. However, since 1914 during the First World War and more widely since 1990, the military powers replaced the lever of war with economic and political sanctions to advance their goals in different countries (Medlicot, 1952). In recent decades, international sanctions have become a recurring feature in political relations between some states. Difficulties caused by embargo can take different forms. Experts consider sanctions as economic tools that affect the economic interests of countries. According to what has been said, the innovation of this article is to examine the impact of economic sanctions of the United Nations and the United States on the misery index of the target countries, including Iran. Methodology and Methods The current research is an applied research in terms of its purpose. In this study, documentary methods will be used to identify variables and collect information, and statistical and econometric methods will be used for its analysis. The statistics and information needed for the research were extracted from the information available on the official website of the World Bank, the Federal Reserve Bank, the websites of the United States Congress and the United Nations website. In the present study, to evaluate the effects of the economic sanctions of the United Nations and the United States on the misery index of the sanctioned countries, the following model is estimated following the studies of Karimi et al. Where Yi,t is the dependent variable, 𝑋i,t represents a vector of control variables including liquidity (broad money) (LIQ), capital stock (K), gross domestic product at constant US dollar prices (2010=100) (GDP) and the degree of trade openness (𝑇𝑂) is imports and exports divided by GDP , UNi,t is the independent variable of United Nations sanctions, USi,t is the independent variable of United States sanctions, 𝛼i is the intercept, δt is the time effects on the constant term, is the error term of the model. Conclusion The results of the estimation showed that the effect of United Nations and United States sanctions on the misery index was positive and significant. UN sanctions with a coefficient of 8.12 and sanctions of the United States with a coefficient of 6.49 have been effective on the misery index. Also, according to the results of the study, proper liquidity management, reducing the economy's dependence on certain product income, reviewing business relations and moving and replacing business partners are among the solutions that can play an effective role in reducing the negative consequences of sanctions for the target countries. To solve each of the two problems of inflation and stagnation, special policies are used, and generally, the monetary policies used for inflationary conditions are opposite to the policies that can be used for stagnation, in such a way that in economic theories, in inflationary conditions, monetary contractionary policies are used in recessionary conditions. Monetary expansion and fiscal expansion policy are suggested. But in a situation where the increase in the misery index is caused by the simultaneous increase in inflation and unemployment, it is very difficult to choose and apply the right policy in such a way that the implementation of a monetary contraction policy will lead to stagnation and an expansionary monetary policy will also lead to inflation. Economic management has special requirements in the context of the intensification of sanctions.
Keywords
United States; Economic sanction; United Nations; Misery Index

References
Afesorgbor, S. K. and Mahadevan, R., 2016. The impact of economic sanctions on income inequality of target states. World Development, 83, 1-11. https://doi.org/10.1016/j.worlddev.2016.03.015 Alnasrawi, A., 2001. Iraq: economic sanctions and consequences, 1990–2000. Third World Quarterly, 22(2), 205-218. https://doi.org/10.1080/01436590120037036 Baltagi, B. H. & Baltagi, B. H. (2008). Econometric analysis of panel data (Vol. 4). Chichester: Wiley.https://link.springer.com/book/10.1007/978-3-030-53953-5 Barro, R. J. (1999). Reagan vs. Clinton: Who’s the economic champ. Business Week, 22(5). ttps://scholar.harvard.edu/files/barro/files/99_0222_reaganclinton_bw.pdf Barzkar, Is. & Jarjarzadeh, Al. (2018). Investigating the impact of economic sanctions and other factors on the attraction of foreign direct investment in OPEC member countries. Energy Economics Quarterly, 15(60), 51-75. [In Persian]. URL: http://iiesj.ir/article-1-621-en.html Cortright, D., Lopez, G. A., Conroy, R. W., Dashti-Gibson, J., Wagler, J., Malone, D. M. and Axworthy, L., (2000). The sanctions decade: Assessing UN strategies in the 1990s (Vol. 1). Boulder, CO: Lynne Rienner Publishers. https://searchworks.stanford.edu/view/4350957 Domac, Il. and Ghiath Shabsigh. (1999). Real exchange rate behavior and economic growth: Evidence from Egypt, Jordan, Morocco, and Tunisia. International monetary fund. 1-24. DOI: 10.1080/00220388.2017.1303673 Dornbusch, R., (1987). Collapsing exchange rate regimes. Journal of Development Economics, 27(1-2), 71-83. https://doi.org/10.1016/0304-3878(87)90007-1 Drezner, D. W. and Drezner, D. W. (1999). The sanctions paradox: Economic statecraft and international relations (No. 65). Cambridge University Press. https://books.google.com Edwards, S., (1989). Exchange controls, devaluations, and real exchange rates: the Latin American experience. Economic Development and Cultural Change, 37(3), 457-494. doi/abs/10.1086/451738 Evenett, S. J., (2002). The impact of economic sanctions on South African exports. Scottish Journal of Political Economy, 49(5), 557-573. https://doi.org/10.1111/1467-9485.00248 Eyler, R. (2007). Economic sanctions: international policy and political economy at work. Springer. https://www. google. com/books/edition/Economic_Sanctions/-suzDAEACAAJ?hl=en Gala, P. & Lucinda, C. R. (2006). Exchange Rate Misalignment and Economic Growth; Old and New Evidence. Economica, Brezilia, 7(4), 165-187. https://d1wqtxts1xzle7. cloudfront. net/3253164/vol7n4p165_187-libre. pdf Garshasbi, Y. (2014). Investigating the effects of international sanctions on Iran's macroeconomic variables. Economic Modeling Research, 7(25), 129-182. [In Persian]. https://doi.org/10. 18869/acadpub.jemr.7.25.129 Ghorbani Dastgerdi, H., Yusof, Z. B. & Shahbaz, M. (2018). Nexus between economic sanctions and inflation: a case study in Iran. Applied Economics, 50(49), 5316-5334. [In Persian]. https://doi.org/10.22075/JEM.2018.2879 Gylfason, T., Herbertsson, T. T. & Zoega, G. (1999). A mixed blessing: natural resources and economic growth. Macroeconomic dynamics, 3(2), 204-225. https://doi.org/10.1017/S1365100599011049 Heine-Ellison, S. (2001). The impact and effectiveness of multilateral economic sanctions: A comparative study. The International Journal of Human Rights, 5(1), pp. 81-112. https://doi.org/10.1080/714003707 Hovi, J., Huseby, R. and Sprinz, D. F. (2005). When do (imposed) economic sanctions work?. World Politics, 57(4), 479-499. https://doi.org/10.1080/714003707 Hufbauer, G., Schott, J., Elliott, K. A., Oegg, B., (2009). Economic Sanctions Reconsidered: His-tory and Current Policy. third ed. Institute for International Economics, Washington, DC. https://www.piie. com/publications/chapters_preview/4075/06iie4075.pdf Jalalinaeni, A. (2016). The secret to changing the relationship between inflation and liquidity. Donya-e-eqtesad. Retrieved from https://www. donya-e-eqtesad. com/fa/tiny/news-1054359 Kamijani, Ak. & Sobanyan, Se. M. H. & Bayat, Sa. (2010). Asymmetric effects of oil revenue growth on inflation in Iran using VECM method. Economic Research Journal, 12(45), 201-226. [In Persian]. https://joer. atu. ac. ir/article_956. html Karimi, I., Fature, C. & Hassanzadeh, M. (1400). The impact of economic sanctions of the United Nations and the United States of America on the misery index of the target countries. Economic Journal, 21(81), 197-229. [In Persian]. https://doi.org/10.22054/joer. 2022. 58143. 937 Katzman, K. (2018). Iran Sanctions. CRS Report for Congress, Congressional Research Service. Washington DC. https://crsreports.congress. gov/product/details?prodcode=RS20871 Khadim, Al. (2013). Effect of economic sanctions on the level of employment in Iran. Economic Strategy Scientific Research Quarterly. 3. 11. [In Persian] https://eco. firuzkuh.iau.ir/article_554920.html Khani, G. G., Sahabi, A & Firouzeh, S. (2012). Identifying the causes of inflationary stagnation in Iran: Threshold error correction method. Economic Modeling Scientific Quarterly, 7(24), 19-35. https://eco. firuzkuh.iau.ir/m/article_554920.html?lang=en Krugman, P. (1987). The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher: Notes on trade in the presence of dynamic scale economies. Journal of development Economics, 27(1-2), 41-55. https://doi.org/10.1016/0304-3878(87)90005-8 Lacy, D. and Niou, E. M., 2004. A theory of economic sanctions and issue linkage: The roles of preferences, information, and threats. The Journal of Politics, 66(1), 25-42. https://doi/abs/10.1046/j.1468-2508.2004.00140. x Lv, Z. & Xu, T. (2017). The effect of economic sanctions on ethnic violence of target states: A panel data analysis. The Social Science Journal, 54(1), 102-105. https://doi.org/10.1016/j.soscij.2016.11.005 Matsuyama, K. (1992). Agricultural productivity, comparative advantage, and economic growth. Journal of economic theory, 58(2), 317-334.https://doi.org/10.1016/0022-0531(92)90057-O Medlicott. W. N. (1952). The economy blocked. Vol. S1 and 2, London: Longman’s, Green and Co. https://www.biblio.com/publisher/longmans-green-co Nadami, Y. & Hassanv, D. (2017). The severity of sanctions and poverty in Iran: the need to cancel sanctions from the perspective of human rights. Strategic Studies of Public Policy, 9 (31), 153-171. [In Persian].http://sspp.iranjournals.ir/article_37588.htm Nephew, R. (2017). The art of sanctions: A view from the field. Columbia University Press. https://ipwna.ir/wp-content/uploads/2018/05/The_Art_of_Sanctions-irpublicpolicy. pdf Neuenkirch, M. & Neumeier, F. (2015). The impact of UN and US economic sanctions on GDP growth. European Journal of Political Economy, 40, 110-125. https://doi.org/10.1016/j. ejpoleco. 2015. 09. 001 Nademi, Y. Jalili, K. & Seyed Parvez, kh, R. (2017). Econometric modeling of the impact of sanctions on the foreign exchange market and its transfer mechanism to the variables of Iran's macroeconomics. Econometric modeling, 2(2), 61-87. https://doi.org/10.22075/JEM.2018.2879 Neuenkirch, M. & Neumeier, F. (2016). The impact of US sanctions on poverty. Journal of Development Economics, 121, 110-119. https://doi.org/10.1016/j. jdeveco.2016.03.005 Okun, A. M. (1970). The Political Economy of Prosperity. The Brookings Institution Washington D. C. https://doi.org/10.1017/S0770451800030293 Oxenstierna, S. & Olsson, P. (2015). The economic sanctions against Russia. Impact and Prospect of Success, FOI. Pape, R. A., (1997). Why economic sanctions do not work. International security, 22(2), 90-136. https://doi.org/10.2307/2539368 Peksen, D. & Son, B., (2015). Economic coercion and currency crises in target countries. Journal of Peace Research, 52(4), 448-462. https://www. jstor. org/stable/24557431 Peksen, D., 2009. Better or worse? The effect of economic sanctions on human rights. Journal of Peace Research, 46(1), 59-77. https://www.jstor. org/stable/27640799 Pourshahabi, F. & Dahmardeh, N. (2014). The Effects of Economic Sanctions and Speculative Attacks on Inflation. Iranian Economic Review, 18(3), 45-67. https://doi.org/10. 22059/IER. 2015. 54803 Razin, O. & Collins, S. M. (1997). Real exchange rate misalignments and growth (No. w6174). National Bureau of Economic Research. Rogoff, K. (1996). The purchasing power parity puzzle. Journal of Economic literature, 34(2), 647-668. https://doi.org/ 10. 3386/w6174 Sadat, A., Seyyed, M. & Hosseini, S. (2015). Evaluating the impact of economic sanctions on the inflation of Iran's economy. Applied Economics, 7(21), 33-50. [In Persian]. https://doi.org/20.1001.1.22516212.1396.7.0.15.3 Sadeghi, A., Rasul, T. & Seyed, K. (2016). The effects of international sanctions and other influencing factors on the inflation rate in Iran (1360-1393). Iran Economic Research, 23(74), 33-57. ‎ [In Persian]. https://doi.org/10.22054/ijer.2018.8825 Sahan, F. (2010), “A Panel Cointegration Analysis of Budget Defcit and Inﬂation for Eu Countries and Turkey”, 6th International Student Conference, Izmir University of Economics. https://dergipark.org. tr/tr/download/article-file/66662 Stijns, J. P. C. (2005). Natural resource abundance and economic growth revisited. Resources policy, 30(2), 107-130. https://doi.org/10.1016/j. resourpol.2005.05.001 Torbat, A. E. (2005). Impacts of the US trade and financial sanctions on Iran. World Economy, 28(3), 407-434. https://doi.org/10.1111/j.1467-9701.2005.00671.x Tuzova, Y. & Qayum, F. )2016(. Global oil glut and sanctions: The impact on Putin’s Russia. Energy Policy, 90, 140-151. https://doi.org/10.1016/j. enpol. 2015. 12. 008 Van Wijnbergen, S. (1984). TheDutch Disease': a disease after all?. The economic journal, 94(373), 41-55. https://doi.org/10.2307/2232214 Wang, Y., Wang, K. & Chang, C. P. (2019). The impacts of economic sanctions on exchange rate volatility. Economic Modelling, 82, 58-65. https://doi.org/10.1016/j.econmod.2019.07.004 Yahia, A. & Saleh, A. S. (2008). Economic sanctions, oil price fluctuations and employment: new empirical evidence from Libya. American Journal of Applied Sciences, 5 (12), 1713-1719. https://ro.uow.edu. au/commpapers/2994 Yang, J., Askari, H., Forrer, J. and Zhu, L., (2009). How Do US Economic Sanctions Affect EU's Trade with Target Countries?. World Economy, 32(8), 1223-1244. https://doi.org/10.1111/j. 1467-9701.2009.01190.x
Statistics Article View: 1,394 PDF Download: 903

Related Links

News

The Impact of UN and US Economic Sanctions on the Misery Index of Targeted Countries