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Economic Rewards Obtain Better Results Than Sanctions, Some Experts Say


Policymakers often view economic sanctions as an attractive middle option between doing nothing, or intervening directly to change an intractable government's behavior. But sometimes providing the 'carrot' of economic rewards, rather than the 'stick' of economic sanctions, can be more effective in persuading a government to change its policies. VOA's Bill Rodgers takes a look at some alternatives to sanctions.

Declaring war is usually the last resort for policymakers pressing a government to change its practices.

That is why they often turn to sanctions to pressure a country's leaders, as is the case currently with Iran, where the United States and other western nations want Tehran to abandon its nuclear ambitions.

But Ted Galen Carpenter of the CATO Institute in Washington says sanctions often do not work.

"The historical record of sanctions, whether unilateral or ad hoc or multilateral, show that they rarely work," Carpenter said. "They fail more often than they succeed, and they especially don't work very often when they're trying to get the target regime to give up on a high-priority policy."

But what can sometimes work is the offer of economic incentives or rewards.

The United States slapped sanctions on Pakistan after it carried out a nuclear test in 1998. The sanctions were aimed at stopping a nuclear arms race on the Indian subcontinent.

Pakistanis resented the sanctions and found ways to circumvent them. Retired Pakistani Major General Jamshed Ayaz Khan heads the Institute of Regional Studies in Islamabad.

"I was in the Defense Production Division when you had these sanctions," he said. "They have an effect, but not an immediate effect, because there is always somebody there to sell the things. But we did manage to survive and survive pretty well."

Washington lifted the sanctions after the September 11, 2001, terrorist attacks on the United States, in hopes of enlisting Pakistan's help in the war on terrorism. Military and economic aid flowed in, and Pakistan began to cooperate in hunting down extremists.

Sanctions expert Gary Hufbauer at the Peterson Institute for International Economics says the new policy better served U.S. interests.

"Pakistan has done a lot, maybe not as much as we've wanted, but it has done a lot in this battle against al-Qaida and the problems going on in Afghanistan," Huftbauer said. "And, if you consider the alternative, which is that we had a hostile Pakistan even today, with this instability, things are so much better than they would have been, if we'd had a hostile Pakistan."

Libya is an example where the prospect of lifted international sanctions and resumed commercial ties helped change government behavior.

International sanctions were imposed on Libya when it became clear it was responsible for the 1988 bombing of Pan Am Flight 103, which killed 270 people, and other terrorist attacks. Washington strengthened those sanctions in 1996.

But Libya eventually agreed to make restitution payments to the relatives of the victims killed in the Pan Am bombing and other attacks. And, in 2003, Libyan leader Muammar Gaddafi also agreed to to end his weapons of mass destruction program.

Libya's ambassador to Washington Ali Aujali says the WMD program no longer made sense in the face of the prospect of having sanctions lifted.

"This was a priority of the Libyan government, to get rid of these sanctions," he said. "Not only because that in daily life we felt it, but because also of the political complications and ... I think both sides realize that we've been able to achieve nothing in 25 years of hostile relations, but we've been able to achieve a lot in three or four years of our new relations."

North Korea is another case where Washington is now offering the carrot of economic incentives as an alternative to the stick of maintaining sanctions, if Pyongyang dismantles its nuclear program. Under an agreement, U.S. aid will flow to the North once it disables key facilities at the Yongbyon nuclear plant.

While such aid offers may work, it is the prospect of eventual commercial ties that is the real lure for many governments. Again Ted Galen Carpenter of the CATO Institute.

"Often, it is less direct economic aid that is the big carrot than access to important markets, such as the American market, such as the market in the European Union. Often, that will be of greater appeal to regimes than the lure of direct aid," Carpenter said.

While, some believe this alternative may be the most effective policy tool to change governments' behavior, policymakers are unlikely to abandon sanctions as a form of pressure.

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