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This dissertation examines the determinants of initiations and outcomes of economic sanctions. It is a collection of three papers that answer different but related questions regarding the effectiveness of economic sanctions. In the first part of my dissertation, I pose the question: When should we expect economic sanctions to succeed? Previous studies predict that sanctions will be more effective when the issue at stake is important, the sender and target are allied, the target's domestic institutions are more democratized, and the target's economy is more dependent on the sender. I subject these hypotheses to empirical testing using a fully structural estimation that employs a game theoretic model as a statistical model. Findings suggest that the issue salience is positively associated with the imposition of sanctions, but not necessarily with their effectiveness. Moreover, allied targets tend to comply even when they can win the sanction contest, while non-allied targets tend to resist when they know that on average the sender would continue sanctioning upon resistance. Finally, I examine these estimated results on alliance with four case studies: US vs. South Korea (1973-1977), US vs. Nicaragua (1977-1979), Britain-US vs. Iran (1951-1953), and US vs. Ethiopia (1977-1992). In the second part, I ask: Do economic sanctions serve international signaling purposes? While the signaling use of sanctions is advanced as an alternative to the instrumental use explanation, no one has tested this signaling approach empirically. A fully structural statistical model that employs a signaling game as a statistical model is used to investigate the existence of signaling effects of sanctions. Estimation results suggest that sanctions fail to work as a signal. The cheapness of sanctions prevents a target state from differentiating a resolved sender state from unresolved senders. Moreover, learning occurs negligibly in sanctions compared with military coercion. When sanctions are imposed, a target rarely updates her initial evaluation about the sender state's resolve, much less than when military challenges are observed. Due to the lack of a signaling mechanism, one of Fearon's rationalist explanations of conflict cannot be applied to sanctions. In the final part, I answer the question: Why do we observe economic sanctions despite strong doubts regarding their effectiveness? While the symbolic use of sanctions is widely used as an alternative to the instrumental use explanation, no one has assessed this alternative approach empirically. I investigate the symbolic use of sanctions for domestic political gains, assessing the effect of sanctions imposition on US presidential approval ratings. Findings suggest that policymakers benefit from imposing sanctions through increased domestic support. This domestic political gain can present policymakers with an incentive to use sanctions as a low cost way of displaying 'do something' leadership to the public during international conflicts. Finally, I examine the results with an out-of-sample case illustration: sanctions against North Korea in 2006.
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