Targeted sanctions and authoritarian elites

A significant part of sanctions deployed by the US, EU and the UN target authoritarian regimes’ ruling elites and aim to promote liberalization by encouraging defections and discouraging repression. Julia Grauvogel, senior research fellow at the German Institute for Global and Area Studies, and Tsz-Ning Wong, research assistant at the University of Mannheim, have developed a formal model to study the expected effects of such measures. The ruler chooses how much power to delegate to elites, while bracing for a challenge that can come from elites or from the masses. The elite decides whether to fight for the ruler, walk away, or stage a coup. If elites get more power, they can serve the ruler better or they can stage a coup – a decision that depends on their unobserved loyalty. Depending on how much the ruler trusts the elite, targeted sanctions may lead to more power being delegated, thus inducing coups and repression, or it may lead to less power being delegated, which induces political moderation and liberalization.

The model identifies the dynamic effect of sanctions. As targeted sanctions are individually costly, they allow individuals to signal their loyalty to the ruler overtime. This can stabilize the regime. The effect is the same if elites have better exit options. The model produces a variety of empirical implications, which we test using novel data on all 205 individuals sanctioned by the EU in the case of Zimbabwe as well as thumb nail case studies on Eritrea and Venezuela. Grauvogel and Wong's research sheds light at the (un-)intended effects of individual sanctions, which has important repercussions for recent attempts to directly punish authoritarian elites for serious human rights violations, such as the US “Magnitsky Act” and the EU “Global Human Rights Sanctions Regime”.