Cameron Manley

-Analysis-

The world has never seen sanctions like those imposed against Russia in response to its invasion of Ukraine. There have been targeted sanctions, of course, or sanctions against rogue countries like North Korea with wide support from the international community. But never in history has there been such a large-scale sanctions regime against one of the world’s biggest and most important economies.

Here's the thing though: these sanctions were introduced in a hurry because the West needed to respond to the war decisively. No one calculated anything, they relied on generalizations and holistic visions, they were “groping in a dark room,” as Elina Rybakova, senior researcher at the Brussels think tank Bruegel, put it.

As a result, debates around the effectiveness of sanctions and how best to use them to influence Russia continue to do the rounds.

Supporters of sanctions have a clear and unified message: we must stop Russia from being able to continue this war. We must deprive them of the goods and technologies necessary for the production of weapons and military equipment, and prevent Russians from living normal lives.

Opponents argue that the sanctions backfire. They insist that Russia is a large enough economy, highly integrated into the energy market and international supply chains, and therefore has enough resilience to withstand restrictions. Those who impose sanctions will be the ones to lose markets and suppliers. They will face increased energy prices and countless other problems. Russia will be able to replace lost relationships with new and even stronger ties with other states.

Economists at the Bank of Canada have attempted to resolve this debate and figure out who is hit hardest by sanctions. They pieced together a model featuring three parties: a country imposing sanctions, a country against which they were imposed, and a third independent country.