After failing to deter the invasion of Ukraine, the United States and its allies have unleashed an astonishing barrage of sanctions against Russia. The allied strategy amounts to financial and security entrapment, decoupling Russia from the world economy and military suppliers. The immediate goal is to stop the killing spree by raising the price of financing the war and the overall cost of not reaching a peace settlement. The long-term goal is to punish Russia by cutting its financial and security ties to the outside world, weakening the basis of Russia’s global power, and thus deterring future revision of the international order.
This Western response to the invasion has prompted another round of questions about the growing use of sanctions in recent years. Critics have both questioned their effectiveness and warned of their unintended consequences. But the record suggests that, while the sanctions strategy is not without risk, its benefits outweigh the dangers. Sanctions provide meaningful leverage, impose greater costs on adversaries than on sanctioning countries, and inflict less pain on civilians than military intervention. They put Russian President Vladimir Putin in a guns-butter trap by drastically increasing the economic cost of aggression and lowering the net gains that can be achieved by conquering Ukraine. While this was not enough to stop Russia’s invasion of Ukraine, it sends a strong signal to potential spoilers about the likely consequences of upsetting fundamental norms underpinning the liberal international order. Economic coercion, particularly financial coercion, is a cost-effective way to police international order, punish irresponsible great powers, and preserve the prevailing hierarchy.
