U.S. Economic Sanction Threats Against China: Failing to Leverage Better Human Rights

Recent literature argues that studies of economic sanction effectiveness suffer from a selection bias by considering only those sanctions that are deployed and not just threatened. These sanction threats, it is argued, should be more successful because both sender and target have an incentive to solve their dispute before entering into a costly economic sanction episode. Testing this assertion is somewhat problematic because sanction threats are, in essence, non-events— sanctions that were never deployed. This paper provides an empirical assessment of one set of threatened economic sanctions—the U.S. threats to revoke or condition China’s MFN status from 1989 to 1995. We show that Washington’s threats did not affect the level of Chinese political repression and actually decreased the human rights accommodations offered by Beijing. Further, when China was cooperative, the U.S. de-escalated its threats. We do not conclude that sanction threats are generally ineffective but that sanction threats directed at human rights behavior create expectations of future conflict that result in their failure. Theoretically, the results highlight the importance of considering the impact that the target’s behavior has on the sender’s sanction decisions. The results also suggest that engagement with countries opening