NEWS ANALYSIS : Economic Sanctions Seldom Work but They Fill a Psychological Need : Geopolitics: But with the end of the Cold War, 3rd World nations no longer can count on the support of one of the superpowers.

As far back as Thomas Jefferson, Americans have been quick--some say too quick--to let loose with economic sanctions in international disputes.

In modern times, these gentler means of persuasion, which Jefferson called “peaceful coercion,” usually have failed because too many ways around them existed.

Now, with the United States and others imposing sanctions on Iraq in retaliation for its invasion of Kuwait, the debate over economic sanctions is about to resume in a new context: Without the Cold War, a smaller country no longer has one superpower to play against another, and--in this unique case--both superpowers are in alignment.

How well will sanctions work this time?

Historically, analysts generally agree, economic sanctions were totally effective only when overwhelming pressure could be brought against a weak target with nobody to turn to. This was the case, for example, when President Jimmy Carter withheld aid from Nicaragua’s Anastasio Somoza in 1978. In the absence of somebody to rescue him, the sanction precipitated the dictator’s downfall.

Economic sanctions also can be counterproductive, hurting the United States more than the target. Companies such as General Electric and Caterpillar have lost major contracts with the Soviet Union because of U.S. economic sanctions, and American wheat farmers still harbor resentment over the Carter Administration’s grain embargo.

Nevertheless, economic sanctions have been popular in the United States because they tend to meet a deep psychological need among many Americans to make a statement stronger than words but less drastic than war. And in the present case, the United States appears to be ill-positioned to engage a potent Middle East force militarily.

Of course, sanctions against Iraq face obstacles, and the chief one is the difficulty of transforming the U.S. embargo into a world embargo. While European nations have imposed sanctions, and Japan has joined in, there remain a number of other markets for Iraqi oil.

But even if Washington fails to enlist the cooperation of everyone--Western Europe and Japan buy more oil from both Iraq and Kuwait than the United States buys--American support for sanctions probably will remain high.

“We have entered a period of domestic life where sanctions are applauded by domestic legislators even though they know they won’t have any effect,” says Gary Hufbauer, a Georgetown University professor who co-authored the 1985 landmark study, “Economic Sanctions Reconsidered,” for the Institute of International Economics.

“Their attitude is that we would like sanctions to work, but if they don’t work that is OK too, because it is the right thing to do and we are doing it.”

However, the more the Cold War has ground down, the more the turning of the economic screw on foreign countries has seemed to obtain at least some of the desired results.

With a rapprochement between the United States and the Soviet Union, targets no longer can rely upon what students of economic sanctions call the “black knight.”

“The idea of a black knight--the other superpower--coming to the aid of a target country is history,” says a leading economic sanctions expert, Jeffrey J. Schott of the Institute of International Economics in Washington. “At least, it won’t happen to the extent that it did. Attitudes have changed, and the black knight is vanishing along with the East-West confrontation.”

For Third World leaders who like to tweak giants’ noses, this is bleak news.

From the end of World War II until recently, whenever a superpower wanted to lean on an upstart smaller country and stop trade, cut aid, freeze assets or inflict another form of economic pressure, the nation to be punished could appeal to, and often count on, the other superpower for help.

Over the years, a good many countries--among them India, Egypt, Afghanistan, Ghana, Ethiopia, Brazil--played to both camps through the black-knight option.

It became a kind of international joke--except to the superpowers--as Asian, African, Middle Eastern and Latin American countries used the ploy and blunted the economic sanctions weapon.

But as Moscow and Washington have moved closer to each other, economic sanctions against third parties may have become more effective.

In Nicaragua, Moscow ultimately declined to play the black knight and thus let U.S. sanctions against the Marxist Central American government take almost full effect. At least marginally, analysts believe, this induced the Daniel Ortega regime to agree to free elections.

In Panama, Moscow did not come to the economic relief of strongman Manuel A. Noriega. Although U.S. military force eventually was brought to bear, economic sanctions are believed to have contributed to the readiness of Panamanians--who had nowhere else to turn--to welcome American troops.

In both cases, as Washington sees it, the white knight won in the black knight’s absence.

In Lithuania, on the other hand, the Bush Administration refused a black-knight role by declining to send economic aid to the Baltic republic after Moscow imposed sanctions and forced the Vilnius government to suspend its declaration of independence from the Soviet Union.

As Moscow views it, the white knight--Moscow, naturally--took the day.

In all three cases, it can be argued that economic sanctions had sufficient bite to affect the outcome. But not everyone fully supports such an idea.

“Despite public perceptions that sanctions in South Africa, Panama and Nicaragua had an impact, only in one case would we agree--in the case of Nicaragua, and even there we feel the effect was marginal,” said Hufbauer of Georgetown University, who with Schott, the International Institute of Economics scholar, wrote the 1985 landmark study “Economic Sanctions Reconsidered.”

“In Panama and South Africa, economic sanctions have not achieved their stated goals,” Hufbauer said. “In Panama we had to invade, and in South Africa even Nelson Mandela concedes they have not worked, although he wants them maintained.”

In those cases, the target country’s economic resources--mainly canal fees in the case of Panama and raw material exports in the case of South Africa--were sufficient to withstand U.S. sanctions.

“Clearly, though,” Hufbauer says, “economic sanctions can be seen as getting a new vitality, now that smaller countries can no longer rush to the other superpower for help. In this sense, target countries are more vulnerable.”

At present, Hufbauer and Schott are tabulating statistics for an updating of their original study that will take into account the subsiding of Cold War tensions.

Both agree that Bush is more restrained in his application of economic sanctions than his immediate predecessor, Ronald Reagan. “Bush is more in tune with our allies than Reagan ever was,” Hufbauer said, citing Bush’s restraint with China.

Even so, the United States has more sanctions in place against more countries--15 at present count--than any other nation. Altogether since the 1956 Suez crisis, Washington has enacted economic sanctions against 57 nations, including allies Britain and France (over their invasion of Suez) and friendly nations Israel, Taiwan and South Korea.

The sanctions have ranged from comprehensive trade and investment embargoes to bans on air landing rights.

Some sanctions--such as those against North Korea--have been in place as long as 40 years.

In their joint study, an examination of 103 cases of economic sanctions imposed by the United States and other countries since 1914, Schott and Hufbauer found that sanctions had failed to achieve their goals in an overwhelming number of cases and often were counterproductive.

Where they found cases of effective sanctions, the instances involved measures to attain specific objectives against smaller countries such as South Korea and Taiwan which agreed under American pressure to relinquish nuclear reprocessing projects.

Currently on the U.S. economic sanctions list, in addition to Iraq and North Korea, are Cuba, Libya, Iran and Syria (on grounds that they sponsor terrorism); Vietnam and Cambodia (as a consequence of Vietnam’s 1978 invasion of Cambodia), and South Africa as a result of its apartheid policies.

In addition, Washington withholds most-favored-nation trading status from the Soviet Union, Bulgaria, Czechoslovakia, Romania, Albania and Mongolia on grounds that they violate human rights. (Hungary and Poland have been removed from this list, and waivers are expected for others.)

IRAQ’S OIL CUSTOMERS In 1989, Iraq supplied the West with an average of 1.58 million barrels of oil each day. Below is a breakdown of who purchased those exports. Although the United States buys more than 28% of Iraq’s exports to the West, it represents only 3% of total U.S. consumption.

Barrels Percent per day United States 28.3 447,000 Japan 13.8 219,000 Italy 8.7 138,000 France 8.1 128,000 West Germany 5.6 90,000 Britain 2.1 34,000 Other Europe 37.3 590,000 15 countries Canada 0.8 13,000

Note: Because of rounding, percentage figures do not total 100.

Source: Energy Information Administration