Economic sanctions and corporate compliance: A game-theoretic model
Losey, Paula Elaine
Morgan, T. Clifton
Master of Arts
This paper examines the question of when economic sanctions will be effectively instituted by states by looking at the role of the multinational corporation in the sanctioning process. Although governments have resources at their disposal with which to enforce their policies, the amount of resources that they are willing to devote to this enforcement are a function of their own cost/benefit calculations. They are also influenced by their predictions of the level of compliance of their private firms that conduct business in the target state. A game-theoretic model of the interaction between a sanctioning government and a private firm is offered and used to derive hypotheses on the conditions affecting a government's willingness to expend monitoring costs to enforce a sanctions policy. These hypotheses are then applied to the cases of the South African and Rhodesian oil embargoes.
African history; Political science; International relations; International law