How Sanctions Feed Authoritarianism

Past experience shows that economic pressure does change societies—but it mostly facilitates hardliners. Iran’s regime may be next.

Soldiers in fatigues marching in formation
Members of Iran's Revolutionary Guards march in a military parade in 2007. (Morteza Nikoubazl / Reuters)

The United States has a long history of intervening overseas to solve one problem and inadvertently creating others. In the 1980s, the Reagan administration armed rebels fighting Afghanistan’s Soviet-backed government only to find that some of them later targeted the United States. During that same decade, America armed the government of El Salvador in a gruesome civil war against leftist rebels that spawned the migration that produced the now notorious gang, MS-13.

It’s worth remembering these precedents as the Trump administration prepares to reimpose sanctions on Iran as part of its withdrawal from the 2015 nuclear deal. American politicians and pundits have spent the last month debating whether those sanctions will make Iran more or less likely to build nuclear weapons. What they’re largely overlooking is what impact years of additional sanctions will have on the country Iran becomes.

The academic literature is clear: Far from promoting liberal democracy, sanctions tend to make the countries subject to them more authoritarian and repressive. In 2009, University of Memphis political scientist Dursen Peksen found that, between 1981 and 2000, sanctions contributed to a significant erosion of human rights in the countries on which they were imposed. The following year, in a study co-authored with the University of Missouri’s Cooper Drury, he found that sanctioned countries grew less democratic too.

The reason is that sanctions shift the balance of power in a society in the regime’s favor. As sanctions make resources harder to find, authoritarian regimes hoard them. They make the population more dependent on their largesse, and withhold resources from those who might threaten their rule. “Because the regime can intervene in the market to control the flow of goods and services made scarce by foreign economic pressure,” Peksen and Drury write, “the leadership will redirect wealth toward its ruling coalition and away from its opponents to minimize the cost of sanctions on its capacity to rule.”

But sanctions don’t just help despotic regimes tighten their grip. They erode the habits and capacities necessary to sustain liberal democracy over the long term. As sanctions devastate a country’s economy, its professionals often emigrate. Families under economic strain withdraw their daughters from school and marry them off at younger ages. And as sanctions restrict the legal flow of goods, people grow accustomed to the black market. In a 2005 study, Brown University’s Peter Andreas noted that sanctions often breed “a higher level of public tolerance for lawbreaking and an undermined respect for the rule of law. … Reestablishing societal acceptance of legal norms can be one of the most challenging tasks after sanctions are lifted, as old habits can be difficult to break.”

The Trump officials preparing to reimpose sanctions on Iran should know this. They should know it because America created many of these unintended consequences when it sanctioned Saddam Hussein’s Iraq. Those sanctions, which began when Iraq invaded Kuwait in 1990, virtually shut off Iraq’s legal commerce with the outside world. In response to a mounting humanitarian crisis, the United Nations in 1995 allowed Iraq to export a limited amount of oil and use the proceeds to buy imported food. But even as the Clinton administration publicly committed itself to regime change, Saddam used “oil for food” to consolidate his rule. By controlling the distribution of food, he made ordinary Iraqis—who before sanctions had bought and sold food on the open market—more dependent on his regime. Under “oil for food,” reported the journalist David Rieff, “Every Iraqi head of household had to have such a ration book, issued by the Ministry of Trade, which named every immediate family member and listed the precise quantities of foodstuffs to which the bearer was entitled. Every food agent had a computerized list from the Ministry of Trade of the people he was supposed to supply with these staples. What this meant in practice was that the regime could maintain a database on every Iraqi citizen and constantly update it, without recourse to the security services or even a network of paid informants. It was a secret policeman's dream.”

If sanctions made it harder for Iraqis to dislodge Saddam, they also kept Iraqis from rebuilding the infrastructure America had destroyed during the Gulf War. Joy Gordon, author of Invisible War: The United States and the Iraq Sanctions, has detailed the interlocking ways in which international sanctions stymied reconstruction: Iraq’s “water treatment system was compromised first when the U.S. blocked equipment and chemicals for water purification; but if Iraq had somehow been able to produce or smuggle those, the water system would then have been compromised by the lack of electrical power, because electrical generators and related equipment had been bombed by the U.S., and because the replacement equipment was blocked by the United States. If Iraq had been somehow able to generate sufficient electricity, then the clean water could not have been distributed because the bombings had caused so much breakage in the water pipes, and the United States then blocked the importation of water pipes, on the grounds that they could be used for weapons of mass destruction. If Iraq had somehow been able to smuggle or manufacture water pipes, it did not have the bulldozers or cranes necessary to install them because those were blocked by the U.S. as well.”

But sanctions didn’t only devastate Iraq’s physical capital. They devastated its human capital too. According to one estimate, “more than three million professionals and intellectuals” left the country during the 1990s. And as Gordon explained to me, even many of the civil servants who stayed in Iraq stopped showing up to their jobs because their salaries had become worthless as a result of hyperinflation. The result was an “infrastructure running with far fewer people and people who had far fewer credentials and less experience.”

As the sanctions literature predicts, Iraqis turned to the black market. “The unemployment and impoverishment brought about not only malnourishment and disease, but crime and a deterioration of the social fabric,” writes Gordon. Saddam relied on Sunni tribal networks to smuggle oil and other goods across Iraq’s borders, thus increasing their power. And to avoid destitution, many Shia Iraqis turned to the charity provided by local Islamist groups. Queen Mary University political scientist Lee Jones, who studied Iraq in the 1990s for his book, Societies Under Siege, told me, “The result of dictatorship and sanctions was the destruction of secular opposition to Saddam. The only thing that survived were tribes, which became the core of al-Qaeda and ISIS, and Shia clerics that formed basis of Shia political parties.”

After toppling Saddam in 2003, the Bush administration discovered that governing and rebuilding Iraq was far harder than it had predicted. Ironically, that was partly because America’s own sanctions policies had made Iraq a less modern, less secular, less educated  society than it had been 15 years before.

Iran is not Iraq. Because it never endured a bombing campaign like the one to which Iraq was subjected during the Gulf War, its infrastructure is in better shape. But the social and political consequences of years of American and international sanctions have proved strikingly similar.

The United States first imposed sanctions on Iran during the 1979 hostage crisis. But Iran was not substantially cut off from global trade until the Obama administration and its European allies imposed sanctions between 2010 and 2012 that made it almost impossible for Iranian companies to import or export to the West or to transfer money through international banks. The economic and humanitarian costs were immediate and profound. Between 2012 and 2014, the percentage of Iranian families living in poverty almost doubled. By 2016, according to the BBC, Iranians were consuming just over half as much red meat, and just under half as much bread, as they had in 1996. Iran’s inability to import prescription drugs, and the raw materials necessary to make them, contributed, according to one 2016 study, to 6 million patients lacking “access to essential treatment.”

In Washington, it’s widely assumed that these sanctions led Iranians in 2013 to elect reformist President Hassan Rouhani, who pledged to cut a nuclear deal that would lift the burden on Iran’s economy. That’s debatable. Iranians had also voted for reformist candidates—such as Mohammed Khatami in 1997—before the sanctions began to bite.

But even as Rouhani won, Iranians warned that Western sanctions were replicating in Iran some of the toxic dynamics of 1990s-era Iraq. In 2013, hundreds of Iranian dissidents warned in a letter to President Obama that, “We are deeply concerned about the recurrence of the Iraqi experience for Iran, which would eliminate the only opportunity for peaceful and democratic change in our country. We are certain that economic sanctions will continue to weaken Iran’s civil society and strengthen the hands of extremists.”

Indeed, the Iranian government—and in particular the hardline Islamic Revolutionary Guards Corps—used the Obama-era sanctions to establish what two Iranian analysts in 2012 called “a near-economic monopoly in Iran as escalating sanctions have crushed Iran’s private sector and driven the middle class out of legitimate businesses.” As in Iraq, the sanctions spawned criminality: what two other Iranian observers have called a “mafia-like class” that has used Iran’s “choked-off economy and its accompanying black markets” to “monopolize the economy.”

As the IRGC exploited sanctions to expand its wealth and power, Iran’s middle class—the prime driver of anti-government activism—grew weaker. Jason Rezaian, the Iranian-American Washington Post reporter jailed by the Tehran regime, argues that the lesson of “the last round of sanctions” against Iran is that “when people are squeezed economically, their needs and aspirations become much more about survival than about working toward change.” The Iranian-American filmmaker and writer Beheshteh Farshneshani noted in 2013 that “sanctions on Iran are only severely weakening the middle class, breaking the collective will and marginalizing democratic voices while solidifying the power of the ruling elite.” Iran’s deteriorating economy, combined with its lack of personal freedom, also provoked what CNN has called a “brain drain to the West.”

As in 1990s-era Iraq, Obama-era sanctions also contributed to making Iranian society more socially conservative. A 2012 report by the International Civil Society Action Network noted that, “Women’s rights experts recognize [a] socio-economic pattern emerging similar to those in Iraq when sanctions were imposed. In Iraq sanctions and the ensuing poverty resulted in the withdrawal of girls from education and increases in child marriage (families were forced to marry off their young daughters to reduce the number of mouths to feed). Iranian girls are at risk of similar developments.” Between 2012 and 2014, according to the Statistics Center of Iran, child marriage rose 20 percent.

Iranian dissidents overwhelmingly supported the 2015 nuclear deal in large measure because it offered the prospect of lifting sanctions and reversing some of these trends. And despite the corruption and incompetence of the Iranian regime, and the continued skittishness of many international corporations, the Iranian economy—which had shrunk in 2014 and 2015—grew in 2016 at a rate of more than 12 percent.

The Trump administration has largely quashed these hopes. Even before withdrawing from the nuclear deal, it lobbied European governments to avoid doing business with Iran and refused to grant permission to American companies wishing to do so. Now, as part of his withdrawal from the agreement, Trump plans not only to reimpose the American sanctions Obama lifted in 2015, but to demand that European companies cease doing business with Iran as well—or else lose access to the American market.

European businesses will not comply entirely, and Iran will go on trading with China and India. But it’s likely that Iran will still grow significantly more economically isolated than it has been over the past two years. In the run-up to Trump’s withdrawal announcement, the value of Iran’s currency, the rial, plunged, sparking fears of hyperinflation. This predictably has played into the hands of pro-regime conservatives, who have responded by vowing to build a “resistance economy” dominated by the state. “For the hardliners,” notes Columbia University’s Richard Nephew, who worked on Iran sanctions and negotiations for Obama, the reinstatement of sanctions “is an opportunity to restrict access to the country and by people in the country to the outside world. This concept of economic resistance is very attractive to them, as they see that openness can damage and undermine their control.”

Iran may still witness uprisings against the regime. But the weaker Iran’s middle class grows, the less organized and coherent those uprisings will become. “If sanctions do indeed trigger a domestic backlash,” Iran experts Mohammad Sadeghi Esfahlani and Jamal Abdi have predicted, “it will not come in the form of a pro-democracy movement, but instead in the form of food riots that will provide an easy target for the Iranian regime’s well-honed apparatus of repression.” It’s also likely that Trump’s withdrawal from the nuclear deal will make Iranians more anti-American. Iranians celebrated the deal because they were desperate for an end to sanctions. Now even the most anti-government Iranians must admit that those sanctions are returning not because their leaders violated the nuclear agreement, but because America’s did.

In 2003, American leaders fantasized about a liberal, democratic, non-expansionist Iraq only to find that America’s own sanctions policies had helped destroy that dream. Now another Republican administration—led by some of the same foreign-policy officials—is spinning similar visions about Iran. The Iranians most invested in that vision warn that America’s policies are making it impossible. And the Trump administration either doesn’t know or doesn’t care.