Sanctions and Russian autocracy

This chapter studies how macroeconomic and political variables interact following a boycott of Russian oil (modelled as a reduction of per capita oil rents) and on how these factors codetermine the impact of sanctions and develop over time. We use an innovative approach to sanctions that provides a dynamic, forward-looking, perspective and deals with the economic and political outcome of sanctions simultaneously. The main methodological contribution of this chapter is that we show that success conditions evolve during a sanction episode. In our simulations the impact of an oil boycott on Russia is considerable, and economic costs act as powerful behavioral incentives. Initially these broad and comprehensive sanctions could strengthen the tendency toward autocracy in Russia somewhat, but this initially negative effect turns positive in the midterm (two to seven years) showing that the oil boycott contributes towards political change deemed necessary for a political solution. This contribution reaches its maximum in the fourth year. This window of opportunity, however, closes in the longer term due to adjustments in the economy and political system.