Economic sanctions, or penalties on the economy, are an increasingly popular tool in foreign policy. They seek to coerce a country into changing policy or behavior by making it more costly to do so. But it is important to understand their effectiveness before using this type of tactic.
There are several different types of sanctions that can be imposed, including: trade restrictions (embargoes), export restrictions, capital controls, and blocking or freezing assets. These can be targeted to specific individuals, companies, or groups, often those with close ties to the government. They may also target entire industries that are important to the country undergoing sanctions. These can have a variety of effects on the target country, including reducing their GDP and overall wealth.
These types of sanctions rely on the fact that the country being sanctioned is highly dependent on international trade, investment, and capital. As a result, the impact of these sanctions can be quite severe. In addition, they can have ripple effects on international business, as well. Companies in other countries may be reluctant to do business with US firms because they know that doing so could put them in violation of American sanctions.
However, it is worth pointing out that while they can be very difficult to implement, they also have a high success rate. Studies have shown that they can be more effective than military action, and that they are generally preferable to starting a war, which has a much higher risk of civilian casualties.