Economic Sanctions and the Distribution of State Capacity in Target Countries: A Disaggregated Analysis of Developing States

Do economic sanctions impact subnational state capacity within developing target states? Building on prior research, I begin with the notion that after sanctions are imposed, a target regime is compelled to alter capacity-related government spending to preserve its hold on power. However, drawing on the territorial politics literature, I contend that the reallocation of dwindling revenues is a distinct spatial phenomenon, a form of redistribution that strengthens local-level administrative and coercive capacity in the geographic center of power but at the expense of targets’ reach into more peripheral regions of the state. To evaluate my theory, I employ a disaggregated analysis that combines new sanctions data with geolocated data on capital distance and subnational state capacity. Directly in line with my theory, I find that upon the imposition of economic sanctions, state capacity becomes more robust in the capital; this effect becomes less intense as capital distance increases, leading to a significant decrease in state capacity in the periphery. These findings are robust to various methodological, model, and variable specifications.