Assessing the effectiveness of anti-Russian economic sanctions in a data-restricted context

A review of methodologies and approaches

Abstract

This paper provides a comprehensive overview of the methodologies used to assess the effectiveness of anti-Russian economic sanctions, with a focus on the challenges and opportunities associated with the use of these methodologies. Drawing on examples from global experience and Russia's experience between 2014 and 2021, the paper examines the methods for evaluation of the impact of sanctions on the economies of target countries, particularly Russia. While various negative effects of the sanctions have been identified, some positive effects have also been found. However, in 2022, the situation changed dramatically with the expansion of military actions and the imposition of unprecedentedly harsh economic sanctions, making it impossible to apply traditional methods of assessment. The limitations of using open data are outlined, including restricted access to national data, and the reasons why traditional methods may lead to false conclusions are discussed. Despite these limitations, it can be argued that the stock market may still provide an opportunity to evaluate the effectiveness of sanctions. A variety of techniques, such as event-driven analysis and heavy-tailedness returns analysis, can help to circumvent data limitations, and the availability of quoted prices will allow for further analysis of the sanctions. This paper highlights the methodological challenges and opportunities associated with assessing the effectiveness of anti-Russian economic sanctions and provides a valuable reference for researchers, policymakers, and practitioners interested in this topic.