The Nuclear Deal and the Success of Sanctions

I am an enthusiastic supporter of the nuclear deal with Iran. The morning the agreement was announced I wrote an op-ed endorsing the agreement that was published by Fox News, which you can access here.

The nuclear deal has many obvious benefits. It blocks Iran’s ability to manufacture weapons-grade uranium and plutonium. It establishes the most rigorous nuclear inspections regime ever negotiated. It calls for lifting sanctions against Iran as it accepts enhanced monitoring and begins to implement nuclear reductions.

The success of the Iran negotiations confirms the value of sanctions as a tool of diplomacy. In our book The Sanctions Decade, George Lopez and I offered a bargaining theory of sanctions. Sanctions are means of applying pressure, but their effectiveness depends on offering to lift sanctions as an incentive for reaching a negotiated settlement.

Sanctions are best understood as tools of persuasion not as instruments of punishment. They are useful for persuading an adversary to come to the bargaining table, but they must be accompanied by meaningful incentives for cooperation.

In the case of the Iran deal it is obvious that sanctions played a decisive role in driving Iran to the bargaining table. President Hassan Rouhani of Iran stated quite bluntly last week that he was elected two years ago to remove the sanctions. Without the nuclear deal, he said, Iran would face an economic “Stone Age.”

Especially important in the Iran sanctions regime has been the unanimous support for targeted measures by the UN Security Council, including Russia and China. Also significant has been the strong financial and commercial restrictions imposed by the European Union.

The combined pressure of UN, European and U.S. sanctions applied effective persuasive pressure. The U.S.-led negotiating team offered to lift that pressure in exchange for Iran’s commitments to restrict its nuclear program. It’s a classic formula for how sanctions are supposed to work.

Sanctions, diplomacy and the crisis in Crimea

President Obama’s announcement yesterday of targeted sanctions against Russia is an appropriate response to Moscow’s aggressive military and political actions in Crimea. So is the European Union’s decision to adopt parallel sanctions. These actions send a message condemning Sunday’s referendum in Crimea as without standing in international law. They indicate that Russia will pay a price if it continues along its current provocative path.

The U.S. and EU measures adopted so far are limited. They leave open the option for stronger sanctions if Russia takes further actions to destabilize Ukraine, while signaling a desire to reach a negotiated political solution to the crisis.

Along with sanctions must come financial assistance to address Ukraine’s economic needs, and diplomatic and political support for its territorial integrity. The United States and the EU should follow up on their financial pledges and work with Ukrainian authorities to ensure accountability for the support provided.

The initial sanctions will not have much immediate impact in Russia, but if more robust measures are adopted over time they could impose costs on Russia’s elite and the tycoons who have stood behind Putin’s power. This could begin to erode the support Putin now enjoys in Russian opinion polls and raise questions about what his aggressive policies have achieved.

Putin’s motives are not clear. He is apparently seeking to prevent Ukraine from aligning with the West, but his heavy-handed actions will only make that outcome more likely. Officials in Kiev are more eager than ever to join the EU and NATO, and European and U.S. leaders may be more willing to oblige. If Crimea joins Russia, lawmakers in Kiev will have fewer pro-Russian voters to accommodate and Ukraine’s delicate political balance will shift slightly to the Westernizers. Ukrainian nationalists from all regions will be less likely to trust and rely upon Moscow.

Hopefully Russia will soon realize its blunder and seek a way out of the crisis. Until then the United States and Europe should apply steady but measured pressure, while actively seeking a diplomatic solution that preserves Ukrainian sovereignty while granting greater autonomy to Crimea.

The most important priority is to avoid armed action. If fighting breaks out it will be very difficult to contain and would have devastating consequences. The U.S. and the EU should work together to prevent and restrain any form of military response.