Reputation or Interaction: What Drives Cooperation on Economic Sanctions?

Abstract

This article studies cooperation on multilateral economic sanctions. Despite low effectiveness and sanction-busting, multilateral economic sanctions are a popular tool of foreign policy. We explore an instrumental approach to sanctions and develop a game theory framework where sender states face a collective action problem when coordinating multilateral coercion. We indicate that cooperation can be achieved through repeated interactions and reputation. We test empirically the two mechanisms with the TIES data on economic sanctions and adherence to past sanction regimes and the Correlates of War data on membership in International Organisations. Our results indicate that reputation is a strong predictor of cooperation on multilateral economic coercion. The effect of repeated interaction appears conditional on reputation; states with poor reputation mediate its effect through repeated interaction.