CAMBRIDGE – As I write, Russia’s army has entered Ukraine’s capital, Kyiv. It is clear now that the threat of sanctions did not dissuade Russian President Vladimir Putin from launching his invasion. But making good on the threat can still play two other roles: Sanctions can limit Russia’s capacity to project power by weakening its economy, and they can create a precedent that might influence Putin’s future behavior vis-à-vis other countries such as Georgia, Moldova, and the Baltic states.
One reason why the threat of sanctions might not have prevented war is that Russia did not regard them as credible. If imposing a sanction is costly, the political will to do so may be weak or evaporate over time. For example, Western consumers are already upset at the high energy costs. An embargo on Russian oil will reduce the global energy supply and send prices even higher, potentially triggering a backlash against the policy.
That may be why Western countries have not imposed it, opting instead for financial sanctions that have, so far, been underwhelming. After all, arguably the most significant sanction to date – the suspension of the Nord Stream 2 pipeline that would have delivered Russian natural gas directly to Germany – will strain Europe’s already tight natural gas market.
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