'Paleontological Institute at The University of Kansas'
Abstract
Do economic sanctions targeting authoritarian regimes have effects on non-sanctioned goods, especially food commodities? Although there is a large and increasing amount of literature written on the effects of economic sanctions on authoritarian countries, only a handful of them have delved into the collateral damage of economic sanctions. Among these handful of studies, few studies have proposed a clear mechanism of how non-sanctioned goods could also be influenced by economic sanctions targeting authoritarian regimes with relatively isolated economies. In this article, by using of a unique quantitative data set consisting of daily food commodities prices sourced from North Korea Rason City’s black and gray markets along with ten qualitative interviews with Chinese formal and informal business people in October and November 2017, I found that depending on the relationship between the targeted country and its ally which could potentially serve as its sanction buster country, economic sanctions targeting authoritarian countries could have larger negative influence on non-sanctioned goods, especially food commodities, even on countries that have relatively isolated economies. I also found that as for authoritarian countries with isolated economies such as North Korea, foreign goods could flow into the targeted country through both formal and informal (smuggling and illicit trade) trade channels. When sanctions are imposed, the higher demand for foreign goods stimulates the flourish of underground channels, which facilitates the inflow of both non-sanctioned and sanctioned goods into the targeted country’s domestic market from the targeted country’s sanction buster country. However, when the targeted country’s sanction buster country which is economically connected to the targeted country through both formal and informal trade channels also participates in the international community to impose economic sanctions on the targeted country, economic sanctions from the targeted country’s sanction buster country could have negative effects on even non-sanctioned goods because the previous underground channels could be cut (formal channels are also likely to diminish due to economic pressure), hence the inflow of both sanctioned and non-sanctioned goods could be prohibited. Combined these findings, I propose a unique method to study and measure the effects of economic sanctions on authoritarian regimes with isolated economies: by looking at the effects of economic sanctions on non-sanctioned goods, especially food commodities. Because when economic sanctions are imposed on authoritarian regimes with isolated economies, non-sanctioned goods could follow the flow of sanctioned goods into the targeted country through informal trade channels, hence we can monitor whether economic sanctions do have negative effects on sanctioned goods or not by looking at sanctions’ effects on non-sanctioned goods: if non-sanctioned goods are in fact immune to economic sanctions and remain non-influenced by economic sanctions, then it is likely that underground channels still remain active, which provides potential valid opportunities for informal traders to smuggle sanctioned goods into the targeted country, and hence eventually bust sanctions. On the other hand, if economic sanctions are proved to have larger effects even on non-sanctioned goods, then this phenomenon suggests that underground channels have already been cut and hence the underground flow of sanctioned goods are likely to have been sufficiently prohibited