Did the Qatar Blockade Work? Evidence from Trade and Consumer Welfare Three Years after the Blockade

Hanan Al-Mal, Ayhab F Saad

Abstract


This article examines the effects of the embargo (blockade) imposed on Qatar in June 2017 by four countries: Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain. Using highly disaggregated product-destination quarterly trade datasets provided by the Qatar General Authority of Customs, we find a significant decline in Qatar’s aggregate imports and consumer welfare (with an increase in the prices of imported goods) in the short run, but not thereafter. Political relations with non-besieging countries seem to be associated with Qatar’s bilateral trade after the blockade, particularly in the first quarter. Shortly after the blockade, countries opposing the blockade experienced a sizable growth in exports to Qatar. In the medium to long run, Qatar succeeded in mitigating the impact of the blockade by diversifying its import origins and adopting new reforms to stabilize the economy and enhance the country’s food security and self-sufficiency.


Keywords


Qatar Blockade; Trade; Political Influence; Consumer's Welfare

Full Text:

 Subscribers Only

References


Al-Mal, H., 2020. The impact of the blockade on the cost of imports to The State of Qatar. Memo, Doha Institute for Graduate Studies.

Crawford, N. and A. Klotz. 2016. How Sanctions Work: Lessons from South Africa. Palgrave Macmillan.

Davis, L. and Engerman, S., 2003. History lessons: Sanctions - neither war nor peace. Journal of Economic Perspectives, 17(2), pp. 187-197. https://doi.org//10.1257/089533003765888502

Doxey, M. 1980. Economic sanctions and international enforcement. Oxford, U.K.: Oxford University Press. https://doi.org//10.1007/978-1-349-04335-4

Drezner, D. 1999. The sanctions paradox: Economic statecraft and international relations. Cambridge, U.K.: Cambridge University Press. https://doi.org//10.1017/CBO9780511549366

Du, Y., Ju, J., Ramierez, C.D., and Yao, X., 2017. Bilateral trade and shocks in political relations: Evidence from China and some of its major trading partners. Journal of International Economics, 108, pp. 211-225. https://doi.org//10.1016/j.jinteco.2017.07.002

Eaton, J. and Engers, M., 1999. Sanctions: Some simple analytics. American Economic Review, 89(2), pp. 409-414. https://doi.org//10.1257/aer.89.2.409

Eaton, J. and Engers, M., 1992. Sanctions. Journal of Political Economy, 100(5), pp. 899-928. https://doi.org//10.1086/261845

Eaton, J. and Kortum, S., 2002. Technology, geography, and trade. Econometrica, 70(5), pp. 1741-1779. https://doi.org//10.1111/1468-0262.00352

Felbermayr, G., Syropoulos, C., Yalcin, E., and Yotov, Y., 2019. On the effects of sanctions on trade and welfare: New evidence based on structural gravity and a new database. Kiel Working Papers 2131, Kiel Institute for the World Economy (IfW).

Haidar, J. I., 2017. Sanctions and export deflection: Evidence from Iran. Economic Policy, 32 (90), pp. 319-355. https://doi.org//10.1093/epolic/eix002

Heilmann, K., 2016. Does political conflict hurt trade? Evidence from consumer boycotts. Journal of International Economics, 99, pp. 179-191. https://doi.org//10.1016/j.jinteco.2015.11.008

Hufbauer, G., J. Schott and K. Elliott. 1990. Economic Sanctions Reconsidered: History and Current Policy (Vol. 1). Peterson Institute.

Hufbauer, G., K. Elliott, B. Oegg, and J. Schott. 2007. Economic sanctions reconsidered. Peterson Institute.

Joshi, S. and Mahmud, A., 2016. Sanctions in networks: The unkindest cut of all. Games and Economic Behavior, 97, pp. 44-53. https://doi.org//10.1016/j.geb.2016.03.005

Kaempfer, W. and Lowenberg, A., 1988. The theory of international economic sanctions: A public choice approach. American Economic Review, 78(4), pp. 786-793.

Kaempfer, W, and Lowenberg, A., 2007. The political economy of economic Sanctions. Handbook of Defense Economics, 2(27), pp. 867-911. https://doi.org//10.1016/S1574-0013(06)02027-8

Levy, P., 1999. Sanctions on South Africa: What did they do? American Economic Review, 89(2), pp. 415-420. https://doi.org//10.1257/aer.89.2.415

Martin, L. 1993. Coercive cooperation: Explaining multilateral economic sanctions. Princeton, U.S.A.: Princeton University Press.

McLean, E.V. and Whang, T., 2010. Friends or foes? Major trading partners and the success of economic sanctions. International Studies Quarterly, 54(2), pp. 427-447. https://doi.org//10.1111/j.1468-2478.2010.00594.x

Milton-Edwards, B., 2020. The blockade on Qatar: Conflict management failings. The International Spectator, 55(2), pp. 34-48. https://doi.org//10.1080/03932729.2020.1739847

Naghavi, A. and Pignataro, G., 2015. Theocracy and resilience against economic sanctions. Journal of Economic Behavior & Organization, 111, pp. 1-12. https://doi.org//10.1016/j.jebo.2014.12.018

Pape, R., 1997. Why economic sanctions do not work. International Security, 22(2), pp. 90-136. https://doi.org//10.1162/isec.22.2.90

Selmi, R. and Bouoiyour, J., 2020. Arab geopolitics in turmoil: Implications of Qatar-Gulf crisis for business. International Economics, 161, pp. 100-119. https://doi.org//10.1016/j.inteco.2019.11.007

Ulrichsen, K. 2020. Qatar and the Gulf crisis. Oxford, U.K.: Oxford University Press. https://doi.org//10.1093/oso/9780197525593.001.0001

Whang, T., 2010. Structural estimation of economic sanctions: From initiation to outcomes. Journal of Peace Research, 47(5), pp. 561-573. https://doi.org//10.1177/0022343310376868




DOI: http://dx.doi.org/10.15355/epsj.16.1.66

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.