Brothers in arms: the value of coalitions in sanctions regimes.

This paper analyzes the economic impact of coalitions on sanctions imposed against Iran in 2012 and Russia in 2014 by employing a quantitative general equilibrium trade model informed by structural gravity estimations. It finds that coalitions amplify the welfare losses inflicted on targeted countries compared to unilateral sanctions, while their effect on the domestic welfare costs borne by sanctioning states depends on the stringency and sectoral focus of sanctions; for example, multilateral sanctions reduce domestic losses in the Russia case but increase them for Iran due to the oil embargo. The study highlights the significant deterrent effect of including large developing economies such as China, whose participation substantially raises welfare losses on Iran and Russia with minimal costs to itself. Additionally, it identifies "optimal" coalitions that maximize the ratio of target welfare loss to domestic cost, showing considerable overlap with actual coalitions, and quantifies transfers needed to equalize welfare losses among coalition members, revealing uneven burden-sharing especially for smaller neighboring states. The paper contributes novel empirical evidence on how coalition composition and sectoral targeting shape the economic costs and effectiveness of sanctions regimes.