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Bystander on the Fence: Sanctions in a Multipolar World

Jan Morgan, Anchi Xia · 2026 · arXiv (Cornell University)

DOI: 10.48550/arxiv.2610.22830 · cited by 0 works (OpenAlex) · open-access PDF

Indonesian

Kami menyediakan teori sanksi perdagangan optimal dengan tiga pemain strategis: Home (sanctioner), Foreign (target), dan Bystander. Bystander dapat bertindak secara unilateral atau sekutu dengan masing-masing pihak yang tunduk pada pembatasan partisipasi. Kami menghasilkan tiga hasil baru. Pertama, anggota koalisi secara umum menetapkan tarif yang berbeda baik di bawah timing Stackelberg atau ketika transfer tidak sempurna. Kedua, karena sanksi diperketat, kesejahteraan Home dapat ditingkatkan bahkan melampaui syarat-syarat perdagangan unilateral-optimum karena interaksi strategis. Ketiga, kami karakterisasi sasaran sanksi yang memungkinkan ketika Home dan Foreign bersaing untuk dukungan Bystander. Implementasi alternatif muncul dengan persaingan: Home memungkinkan Foreign menang, tetapi transfer Foreign ke Bystander menerapkan sanksi

Machine translation (Meta M2M100); the English original follows.

Abstract

We provide a theory of optimal trade sanctions with three strategic players: Home (sanctioner), Foreign (target), and Bystander. Bystander may act unilaterally or ally with either party subject to a participation constraint. We derive three novel results. First, members of a coalition generically set different tariffs either under Stackelberg timing or when transfers are imperfect. Second, as sanctions tighten, Home's welfare can improve even beyond the unilateral terms-of-trade optimum due to strategic interactions. Third, we characterize feasible sanctions targets when Home and Foreign compete for Bystander's support. An alternative implementation arises with competition: Home lets Foreign win, but Foreign's transfer to Bystander implements the sanctions target. We apply our model to sanctions against Russian crude. In a calibration exercise, cooperation among India, China, and Russia best matches observed data. Sanctions could have been roughly 70% more effective had China and India acted unilaterally or had the sanctioning coalition made them a better offer.

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Topics: Sanctions, Stackelberg competition, Bystander effect, Foreign policy, Welfare, China

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