SANCTIONS AT A CROSSROADS

When economic pressure stops changing behavior: should sanctions be lifted, redesigned or made conditional?

By AI TV INFO | Global Intelligence — International Affairs & Economic Analysis

17 August 2026

Economic sanctions were once presented as the middle ground between diplomacy and military force: strong enough to impose a cost, but limited enough to avoid war.

But after decades of sanctions regimes—from Cuba and Iran to North Korea, Venezuela and, most recently, Russia—a difficult question has become increasingly unavoidable:

What should governments do when sanctions impose enormous economic costs but fail to produce the political change for which they were imposed?

The answer is not necessarily to abolish sanctions altogether. But there is a growing argument that sanctions should be measurable, reviewable, conditional and reversible—and that sanctions that demonstrably fail their objectives should not continue indefinitely simply because they are politically difficult to remove.

Recent research strengthens that debate. A 2026 study in the Journal of Economic Behavior & Organization found null or negative effects across the political and economic outcomes it examined, while noting that sanctions are extraordinarily complex to design and enforce effectively.

And the U.S. Government Accountability Office has acknowledged a fundamental problem: U.S. agencies often lack comprehensive assessments capable of determining whether sanctions are actually achieving their foreign-policy goals.

The paradox of sanctions

The theory is straightforward:

Sanctions → economic pressure → political pressure → behavioral change.

But reality can look very different:

Sanctions → economic damage → adaptation → alternative trade → sanctions evasion → greater state control → little political change.

In some cases, the targeted government becomes more dependent on a smaller circle of friendly states.

Russia is an obvious contemporary example.

Western sanctions dramatically disrupted Russia’s economy in 2022. Yet Russia subsequently redirected much of its energy trade toward non-Western markets and adapted its supply chains.

The U.S. GAO found that Russia’s economic growth was about six percentage points lower in 2022 than its estimated counterfactual, but found no statistically significant difference between Russian growth and its expected trajectory in 2023 and 2024. It also found that export controls hindered—but did not prevent—Russia from obtaining important technologies.

The World Bank records Russian real GDP growth of 4.3% in 2024.

That does not mean sanctions were harmless.

It means something more important:

Economic damage is not the same thing as political success.

Russia: sanctions hurt—but did they achieve the objective?

The central political objective behind many Western sanctions was to increase the cost of Russia’s war against Ukraine, constrain its military-industrial capacity and ultimately influence its strategic behavior.

There is evidence that sanctions have imposed costs.

But Russia has also demonstrated considerable capacity to adapt.

Oil that once went primarily to European buyers could be redirected toward other markets. Financial transactions could move through alternative jurisdictions. Components could be sourced through intermediary countries. A “shadow fleet” could be used to transport oil.

The GAO specifically concluded that Russian actions, including the use of a shadow fleet, limited the effectiveness of the oil-price cap.

This creates the uncomfortable policy question:

If sanctions reduce a country’s economic growth but do not produce the political objective, how long should they remain in place?

That question is particularly relevant in 2026, as the EU continues to debate further sanctions. On August 17, the EU’s foreign-policy chief said the bloc was preparing another major sanctions package for Russia.

The argument is no longer simply about whether sanctions cause pain.

They clearly can.

The question is whether the additional pain produces proportionate political results.

Germany: when the sanctions strategy comes back home

The European experience demonstrates another problem: sanctions can impose costs on the sanctioning coalition itself.

Germany provides the clearest example.

Before the Ukraine war, Russia was a major supplier of German and European energy. Germany’s industrial model depended heavily on relatively inexpensive natural gas.

After the rupture in Russian energy supplies, Europe had to replace pipeline gas rapidly with LNG, Norwegian gas, other suppliers, renewables and demand reduction.

The transition succeeded in avoiding the catastrophic shortages initially feared.

But it was expensive.

Germany entered a prolonged period of economic weakness.

Official German statistics show real GDP:

• 2022: +1.8%
• 2023: −0.9%
• 2024: −0.5%
• 2025: +0.2%

Germany therefore suffered two consecutive years of recession before returning to marginal growth in 2025.

And the weakness continued into 2026: first-quarter 2026 GDP was only 0.5% above the same quarter of the previous year.

But there is an important journalistic distinction.

It would be wrong to write:

“Russian sanctions caused Germany’s recession.”

The evidence does not establish such a simple causal relationship.

Germany simultaneously faced:

• high energy costs;
• weak global demand;
• Chinese competition;
• the transformation of the automobile industry;
• high interest rates;
• weak investment;
• domestic structural problems.

Destatis itself highlighted China’s growing competition and weak investment as important factors behind Germany’s continuing weakness.

The more defensible conclusion is:

The rupture with Russia amplified existing German structural problems, particularly through the energy shock.

Europe escaped the energy crisis—but at a price

The EU succeeded in doing something many analysts initially considered extremely difficult: replacing most of its dependence on Russian gas.

According to the European Commission, Russian gas fell from 45% of EU gas imports in 2021 to 12% in 2025. LNG’s share rose from 20% to 45%.

Russian gas imports fell from approximately 152 billion cubic metres in 2021 to 36 billion cubic metres in 2025.

This is an important achievement for European energy security.

But it also illustrates the economic trade-off.

Europe replaced a large quantity of pipeline gas with:

LNG + Norwegian gas + other suppliers + renewables + conservation.

The result was greater diversification—but not necessarily the return of the old cost structure.

For European industry, the crucial question is not simply:

“Can we obtain gas?”

It is:

“Can European factories obtain energy at prices competitive with factories in the United States, China or the Middle East?”

That is the much more difficult question.

The paradox: sanctioned countries can grow while sanctioning countries stagnate

This is perhaps the most politically striking feature of the sanctions debate.

Russia was heavily sanctioned.

Germany was one of the countries imposing those sanctions.

Yet:

Russia: strong headline GDP growth after the initial 2022 shock.

Germany: two years of contraction followed by near-zero growth.

That comparison does not prove that sanctions benefited Russia or caused Germany’s weakness.

Russia’s GDP growth has been heavily influenced by enormous government and military expenditure, energy exports and wartime mobilization.

GDP also measures economic activity—not necessarily prosperity, productivity or civilian welfare.

Producing more military equipment raises GDP.

So does government spending.

Neither automatically makes a population richer.

But the comparison demonstrates an important strategic reality:

A country’s ability to redirect trade can determine how effective sanctions actually are.

A resource-rich country with alternative markets may be much harder to economically isolate than a small country dependent on the sanctioning coalition.

The sanctions-evasion economy

Sanctions can also create an entirely new economic ecosystem.

When legitimate trade is prohibited, demand does not necessarily disappear.

It searches for another route.

That produces:

Third-country intermediaries

↓

Shell companies

↓

Alternative financial channels

↓

Transshipment

↓

Shadow shipping

↓

Cryptocurrency and other payment mechanisms

↓

Parallel supply chains

The longer this continues, the more sophisticated the infrastructure becomes.

This produces an unintended consequence:

Sanctions can encourage the creation of the very alternative economic networks that later make sanctions less powerful.

The GAO has identified sanctions-evasion and enforcement as continuing challenges, including Russia’s use of alternative channels and technologies.

And the West may be weakening its own leverage

This is the longer-term strategic concern.

The international economic system gives the United States and its allies enormous power because of their control over:

• the dollar;
• major financial institutions;
• shipping and insurance;
• advanced technologies;
• banking infrastructure;
• semiconductor supply chains;
• major consumer markets.

Sanctions weaponize that economic power.

But excessive use can create an incentive for targeted countries to build alternatives.

The strategic equation becomes:

More sanctions today

→ greater pressure

but potentially also:

More sanctions

→ more incentives to create alternative systems

→ less dependence on Western finance and technology

→ less Western leverage tomorrow.

That does not mean de-dollarization or alternative payment systems will replace the Western financial system anytime soon.

It means that sanctions can have a long-term strategic cost that is difficult to measure in quarterly GDP figures.

The humanitarian problem

There is another reason to reconsider broad sanctions: economic pressure rarely stops at the government palace.

It reaches:

• workers;
• pensioners;
• small businesses;
• hospitals;
• universities;
• importers;
• families;
• humanitarian organizations.

Even when food and medicine are formally exempt, banks and companies may avoid transactions because they fear accidentally violating sanctions.

This is known as over-compliance or de-risking.

The result can be:

Legal humanitarian exemption

but

practical inability to obtain financing, insurance or payment services.

The U.S. GAO’s review of sanctions research found evidence of unintended effects on human rights and public health, with larger economic impacts sometimes associated with greater unintended consequences.

That creates a fundamental ethical question:

How much civilian suffering is acceptable if the political objective is not being achieved?

Sanctions can strengthen the government they are supposed to weaken

There is also a political paradox.

An authoritarian government facing economic hardship can blame the foreign enemy.

The message becomes:

“Your suffering is caused by them, not us.”

That can allow governments to:

• centralize economic control;
• suppress opposition;
• restrict foreign organizations;
• control scarce goods;
• strengthen security services;
• portray domestic critics as foreign agents.

Meanwhile, sanctions can destroy precisely the economic and social groups that might otherwise push for political change.

A prosperous middle class with international connections may exert pressure for reform.

A population struggling simply to obtain necessities may have far less political leverage.

This is not universal, but it is a serious risk that sanctions policy has to account for.

Cuba, Iran and North Korea: the test of time

The strongest argument against indefinite sanctions is often not GDP.

It is duration.

Cuba has experienced a U.S. embargo for more than six decades.

North Korea has faced extensive international sanctions for decades.

Iran has experienced successive waves of economic pressure.

In none of these cases has economic isolation produced the complete political transformation originally sought by sanctioning governments.

That does not mean sanctions have had no effect.

They may have:

• reduced revenues;
• restricted technology;
• increased costs;
• limited access to finance;
• constrained military programs.

But the distinction is crucial:

Constraining a government is not the same as changing its government.

If the objective is regime change or fundamental behavioral transformation, policymakers need to demonstrate that the mechanism is actually moving toward that outcome.

The biggest problem: sanctions often have no expiration date

This may be the most important policy criticism.

Governments are usually very good at imposing sanctions.

They are much less good at defining:

What exact result will cause them to be removed?

That creates an asymmetry:

Sanctions imposed → easy.

Sanctions maintained → automatic.

Sanctions removed → politically difficult.

This can turn a temporary instrument of pressure into a permanent feature of international relations.

And once companies restructure their supply chains and governments develop alternative trade relationships, lifting sanctions may no longer restore the old economic relationship anyway.

A better model: sanctions with a pathway out

The answer does not have to be:

Sanctions or no sanctions.

There is a third option:

Conditional sanctions relief.

The mechanism could be:

Specific political demand

↓

Targeted sanctions

↓

Verifiable concession

↓

Partial sanctions relief

↓

Further concession

↓

Further relief

↓

Comprehensive agreement

↓

Normalization

For example:

This turns sanctions from a punishment mechanism into a negotiating mechanism.

The case for a sanctions “sunset clause”

One potential reform deserves serious consideration:

Every major sanctions regime should periodically have to answer three questions.

1. What exactly is the objective?

Not “pressure Russia.”

Instead:

What measurable political or security outcome are we seeking?

2. Is the objective being achieved?

If not:

Why are we continuing the policy?

3. What is the humanitarian and economic cost?

And then governments should have to choose:

Continue

or

modify

or

narrow

or

suspend

or

remove.

The GAO’s recent Russia report essentially identifies the first part of this problem: U.S. agencies had not established sufficiently specific objectives linked to measurable outcomes and targets, making it difficult to assess effectiveness.

That is a striking admission from a government oversight body in one of the world’s most powerful sanctioning states.

But lifting sanctions is not automatically the right answer

There is a strong counterargument.

Sanctions can still be useful when:

• the target is economically dependent on the sender;
• multiple countries enforce them;
• the objective is narrow and achievable;
• enforcement is strong;
• there is a credible diplomatic off-ramp;
• sanctions are targeted at decision-makers rather than populations;
• military or proliferation capabilities are being constrained.

The GAO’s earlier review of sanctions research found that sanctions were more likely to influence behavior when imposed through international organizations such as the UN or when the target had an existing dependency or relationship with the United States.

So the evidence does not justify saying:

“Sanctions never work.”

The more defensible conclusion is:

Sanctions work under some conditions, but their economic impact is much easier to demonstrate than their political effectiveness.

The real question

The debate should therefore move beyond:

“Are sanctions good or bad?”

The more useful question is:

“What measurable result are these sanctions producing, what are they costing, and would another policy produce a better result?”

If sanctions are:

hurting the target

but

not changing its behavior,

while simultaneously:

hurting civilians,

raising costs for the sanctioning coalition,

creating evasion networks,

encouraging alternative financial systems,

and

reducing diplomatic engagement,

then maintaining them indefinitely becomes increasingly difficult to justify on effectiveness grounds.

That does not necessarily mean lifting every sanction.

It means redesigning the system.

AI TV INFO’s VERDICT

The strongest argument for sanctions is that they provide governments with an alternative to military force.

The strongest argument against indefinite sanctions is that economic pain is not the same thing as political leverage.

The experience of Russia, Iran, Cuba, North Korea, Venezuela and others suggests that governments can sometimes survive—and even adapt to—extraordinary economic pressure.

Meanwhile, Europe’s experience demonstrates that sanctions can create substantial costs for the countries imposing them, particularly when they disrupt strategically important energy and industrial relationships. Germany’s two-year recession is a powerful illustration, although it would be misleading to attribute the country’s entire economic weakness to Russia sanctions alone.

And the latest evidence makes one principle increasingly difficult to ignore:

A sanctions regime should have a measurable objective, a humanitarian safeguard, a diplomatic off-ramp and a mechanism for termination.

If it does not change behavior after years of pressure, policymakers should be willing to ask the uncomfortable question:

Are we still using sanctions as a tool—or have sanctions themselves become the policy?

That is the point at which lifting, narrowing or trading sanctions for concrete concessions may produce more political leverage than simply adding another sanctions package.

AI TV INFO | International Affairs • Economy • Geopolitics