Designing foreign policy

Abstract The literature on economic sanctions has long studied sender countries’ policymaking as a simple choice between imposing sanctions to extract concessions from the targeted country and doing nothing. We depart from this simplifying assumption and analyze sanctions as a multifaceted foreign policy instrument. We argue that senders design sanction policies in response to policy preferences of two domestic constituencies. Voters expect a response to an international dispute in the form of some policy, such as economic sanctions; hence, the sender’s policymakers seek to demonstrate their competence in foreign affairs by imposing sanctions. Once the policymakers announce the use of sanctions, special interest groups that stand to experience economic losses when this foreign policy is implemented pressure the policymakers to choose sanction measures limiting such losses. As a result, the policymakers design sanction policies to include measures that will be less detrimental to special interest groups. We test our theoretical argument using the Threat and Imposition of Sanctions data and show that, while pressures from public opinion increase the likelihood of sanctions, special interest groups that benefit from the relationship with the target country are associated with a lower probability of the use of sanction measures that would impose substantial costs on domestic interest groups.