Original title: Do Sanctions Backfire? New Evidence on the Macroeconomic Effects of Supporting Ukraine
Vicente Rios, Izaskun Barba, Lisa Gianmoena · September 2026
When countries place economic penalties, or sanctions, on another nation, they risk hurting their own economies. Researchers studied whether penalties on Russia backfired on the nations that imposed them. They analyzed economic data to track how these penalties affected both sides. Their method separated the 2014 penalties from the larger 2022 escalation, while accounting for how different nations experience global economic shocks. They discovered that the main backfire effect hit consumer prices rather than overall economic production. Compared to the period from 2019-2021, the nations imposing sanctions saw a significant jump in prices after 2022. However, the researchers found no solid proof that the penalties reduced overall economic output per person. The real self-inflicted damage came through higher prices, not lost growth.
You and your neighbors decide to stop buying from a store because you dislike its owner. You expect the store to close down. But the store also supplies key ingredients to many local bakeries. The bakeries now pay more for those ingredients and raise their bread prices. In this paper, the sanctions are the boycott, Russia is the store, and the higher bread prices are the price increases that sanctioning countries experience.
Policymakers often assume sanctions mainly hurt the target, but this study shows they also inflate prices at home. That inflation is a direct cost of foreign policy, paid by consumers in sanctioning countries. It shifts the debate from whether sanctions work to how much they cost the imposer.
The abstract doesn't state limitations explicitly, but the study only examines aggregate prices and GDP per capita, not other potential economic or political costs. The results depend on the specific panel of countries and time period, and the identification relies on the assumptions of the imputation design.
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Do Sanctions Backfire? New Evidence on the Macroeconomic Effects of Supporting Ukraine — Vicente Rios, Izaskun Barba, Lisa Gianmoena
Abstract licence: CC0
Explanation generated by Synthesis from the abstract — it is not the original paper. This is a preprint, so it hasn't necessarily been peer reviewed.