The Placebo Effect of Economic Boycotts

Beads, the way I understand it, economic boycott hurts each side about equally because it interferes with free trade. These are ``feel good`` actions used to make some political points domestically and are essentially wasted efforts. Usually, the individuals who are involved in decisionmaking are the least hurt - the common people on each side the most. Also, it creates additional incentives and opportunities for dishonest parties or brokers to make money (e.g., Saddam`s vouchers.) Perhaps one instance where such a boycott may have had some significant effect would be South Africa from the days of apartheid - when the boycott was so overwhelming - but even then it was not just the boycott alone which did the trick.

Ranjit #1

The point which I am trying to make is that as a means of policy, economic boycotts are utterly useless, and I gave some examples. Let me give you some policy implications of your examples. Say USA cuts off ALL aid to Israel and Pakistan and economically boycotts them to force Israel to withdraw to the 1967 borders and allow resettlement of refugees, and to force Pakistan to give up its nuclear weapon. Both countries will go into a tail-spin, but the objective will not be achieved. That`s the point that I am making. Gandhi`s economic boycot hurt the Brits but that was not the reason why the brits decided to let India go. See the point? economic boycotts hurt people who least deserve or be able to handle it, and they dont fulfill the policy objective. Only thing it does is to make some drawing room intelligensia happy. Period.

Theres a famous Chinese saying that `Always adhere to your belief even though you are in a poor situation` - sanctions or no sanctions - one does not have to loose his dignity or pride - specially if you are making decisions which effects the nation . Sanction does harm economic intrests but its sort of a blessing in disguise since it makes you self-sufficient in many fields.

Bhaskar,

I do not see how you can generalize a conclusion that economic boycotts are ineffective. If country A is severely depenedent on country B like Pakistan or Israel is on US and country B pulls the plug, you bet country A will suffer. If the US stops all aid to Pakistan or Israel, both the countries will go into a tailspin. Similarly if the oil countries decide to pay the economic price and stop oil supply, it will have humungous impact on the west. Gandhi`s economic boycott did hurt the Brits because the british economy was kept afloat by the colonies.