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The biggest thing that Washington gets wrong about sanctions

US Treasury Secretary Jack Lew.
Chip Somodevilla/Getty

For as often as the United States uses economic sanctions as a foreign policy tool, we sure don't talk about them much. That's even more surprising given that the academic research on sanctions is pretty mixed, and often finds that they don't work.

So it was a big surprise to hear Treasury Secretary Jack Lew give a speech, early on Wednesday, about economic sanctions, when they work, and, most surprising of all, when they don't. (Sanctions are a foreign policy tool, but they are implemented by the Treasury Department, which is why Lew was speaking on them.)

This speech is a big deal. Dan Drezner, at the Washington Post, called it "the first time that I can recall [that] a policy principal has articulated some general guidelines about the United States’ use of economic sanctions going forward."

Lew argued that sanctions are an important and often useful tool, but he also made a point about the importance of removing sanctions. It's a point that's both crucial to making sanctions work and speaks to what is perhaps the biggest misconception about them, even among many Washington policymakers.

Sanctions only work, he said, if countries believe we will remove those sanctions when they've done what we asked them to do. If we don't follow through on our promises, targeted countries have no reason to do what we've asked, and sanctions become useless.

"Since the goal of sanctions is to pressure bad actors to change their policy, we must be prepared to provide relief from sanctions when we succeed," Lew said, in a clear rebuke to the members of Congress who wish to reimpose sanctions on Iran even though it is complying with the nuclear deal. "If we fail to follow through, we undermine our own credibility and damage our ability to use sanctions to drive policy change."

This point is often lost because, as Drezner put it, it "scrambles the way that Washington likes to talk about credibility and resolve. Those terms are usually applied to the carrying out of promised military threats":

For sanctions, however, credibility also means that if a deal is struck, the sanctions will actually be lifted. If a sanctioned country does not believe that the United States will actually lift the salient sanctions, why should the target ever make a concession?

I guarantee you that the more difficult it is for the US government to lift sanctions, the less useful the tool will be.

This point should be obvious, yet it's not how Washington talks about sanctions at all. Rather, we tend to treat sanctions as a way of expressing whether or not we like a country. We dislike Iran, therefore we sanction it to express that dislike.

If Iran happens to be complying with the nuclear deal, that doesn't really alter our conception of Iran as a bad country, so therefore there is no appetite for removing sanctions as we'd promised to do.

If you think I'm getting this wrong, consider one of the most common arguments against the Iran deal: How can you reward Iran by lifting sanctions when it still threatens Israel and sponsors terror groups? That is an argument that says we have to sanction Iran in perpetuity for as long as we continue to consider Iran a bad country.

This also comes from a certain worldview that says that America should maintain a posture of maximal hostility toward adversaries, and that anything less is therefore a surrender that will only embolden the scary enemy.

It's easy to see why people like this worldview, which provides us with simple answers to solve complex problems (be more hostile to the adversary) and an emotionally satisfying narrative about good unflinchingly opposing evil.

But while that narrative might work in the movies, it does not in the real world. One reason for this is that in the movies, the conflict ends when the enemy is destroyed outright. In the real world, even a country as powerful as the United States has to learn to coexist with other nations.

Indeed, a policy of maximal and unflinching hostility only makes sense if you are seeking not policy concessions from the target country, as sanctions are designed to achieve, but rather that country's outright destruction.

And, to their credit, some proponents of permanently expanding sanctions on Iran do admit that regime change is their goal. But more often, I suspect, the desire to permanently maintain sanctions is rooted in a simpler gut sense that adversaries are bad and so should be maximally opposed and punished.

Unfortunately, it is the nature of the world that other countries will continue to exist, and will continue to behave in ways they perceive as in their own interests, even when that contradicts the United States. Those disagreements will continue to become, at times, meaningfully adversarial.

In those cases, America's economic might, and its status as world financial capital, allows it to use economic sanctions as a tool for nonviolently coercing other states to either stop their bad behavior or make necessary concessions.

But that only works if those other states believe that sanctions will come off when they meet the United States' demands. That requires that America itself, including its political actors, understand how those sanctions function and how they don't.

The risk is not just that we make sanctions meaningless by eroding our own credibility with them. It is also that innocent people who are affected by the sanctions will suffer meaninglessly. And at some point we will make the American financial system less attractive to the world, because doing business within that system requires complying with American sanctions.

Lew raised this risk in his testimony. "If foreign jurisdictions and companies feel that we will deploy sanctions without sufficient justification or for inappropriate reasons — secondary sanctions in particular — we should not be surprised if they look for ways to avoid doing business in the United States or in US dollars," he said.

That's an unlikely outcome, but it's one of severals ways that the United States risks its own interests — not to mention the welfare of actual human beings in the targeted countries — by misunderstanding how sanctions work. In order for sanctions to be effective, we have to remove them when the targeted country complies with our initially stated demands in imposing them.

If that feels too much like "rewarding" the targeted country for policymakers to stomach, then they shouldn't be imposing sanctions in the first place.