Impact of Economic Sanctions on Domestic Political Stability: A Field Study

Thesis Abstract

This study investigates how economic sanctions influence domestic political stability in targeted states, addressing gaps in understanding the mechanisms through which external coercion translates into internal political dynamics and policy responsiveness in challenging economic environments. The aim is to determine the conditions under which sanctions undermine or bolster political stability, and to identify mediating factors such as regime resilience, elite cohesion, social protection programs, and public opinion. Specific objectives are (1) to measure changes in political stability indicators—government legitimacy, protest frequency, regime durability, and policy responsiveness—before and after sanctions implementation; (2) to examine the moderating role of regime type, economic diversification, and external support on sanctions effects; (3) to analyze public perception and elite strategic behavior in sanction-affected contexts; and (4) to assess policy implications for sanction design and international diplomacy. The study adopts a mixed-methods approach grounded in liberal-institutional and rational choice theory, drawing on the realist emphasis on constraint and an interpretive lens to capture perceptions, with reference to theories of economic statecraft, sanctions effectiveness, and political legitimacy. The quantitative strand uses a difference-in-differences design across a sample of ten sanctioned cases and five comparable non-sanctioned controls over a ten-year window (2014–2023), employing time-series regression analyses to isolate sanction impact while controlling for confounders such as commodity price shocks and aid fluctuations. The qualitative strand consists of 40 in-depth semi-structured interviews with government officials, opposition leaders, and civil society actors, complemented by 25 focus group discussions with citizens in urban and rural areas, and thematic analysis to elucidate mechanisms linking sanctions to political stability. Data collection instruments include a standardized survey instrument to capture perceived legitimacy, protest propensity, and policy support (validity assessed via content and construct validity), interview guides, and a coding frame for thematic analysis. Sampling combines purposive selection of cases with matched controls using propensity score matching and stratified sampling by regime type (authoritarian, hybrid, and liberal democracies) and geographical region to enhance comparability. Validity and reliability are reinforced by triangulation across data sources, investigator triangulation, and pilot testing of survey instruments with 100 respondents. The analytical framework integrates econometric models—ordinary least squares and fixed-effects regressions, with robustness checks including placebo tests and instrumental variable approaches where appropriate—and qualitative coding to integrate findings. Expected findings include sanctions correlate with increased political instability in authoritarian and semi-authoritarian regimes where state capacity is constrained and elite fragmentation is minimal, while more resilient or diversified economies exhibit weaker instability responses; in democracies or democracies-in-transition with strong civil society, sanctions may provoke policy concessions or public protests but with limited regime collapse risk. The study anticipates identifying mediating pathways such as fiscal adjustment pressures, social safety-net depletion, strategic retaliation by elites, and shifts in public opinion toward or away from the government. The contribution to knowledge lies in clarifying the conditionality of sanctions’ political effects, integrating macroeconomic indicators with micro-level perceptions to advance a more nuanced theory of economic statecraft and political legitimacy under stress. The main conclusion is that sanctions influence domestic political stability through contingent pathways shaped by regime type, economic diversification, and social protection capacity, necessitating sanction design that mitigates humanitarian impacts and strengthens domestic accountability. Policy recommendations include tailoring sanctions to minimize civilian harm, enhancing transparency and humanitarian exemptions, leveraging multilateral enforcement to reduce evasion, and coupling coercive measures with diplomatic engagement and domestic governance reforms to preserve legitimacy and reduce instability risks. Further research should explore longitudinal impacts across different asset classes and investigate the role of international financial institutions in moderating political repercussions.