Economic Sanctions as a Foreign Policy Tool: A Case Study of the Iran-West Conflict

Abstract

The study examines how economic sanctions affect Iran's economy, society, and regional influence, revealing their effectiveness and long-term implications. It uses quantitative and thematic analysis of government speeches, press releases, and news. The sample included 50 annual data observations from 1969 to 2018. This study's results indicate that economic sanctions negatively impact the Iranian economy, especially Iran's oil exports, banking, and manufacturing sectors. The ARDL model implies that sanctions enormously affect Iran's macroeconomic instability, and the more severe the sanctions imposed on Iran, the more significant the negative impact on the country's macroeconomic stability. The theme analysis demonstrates how sanctions have limited Iran's nuclear program but not stopped it completely. However, they have failed to reduce Iran's ability to support militant groups or its regional influence.

Furthermore, sanctions have affected the tone of official speeches by Iranian leaders towards the West, making them more cooperative when Iran faces economic hardship and internal unrest. The study recommends that policymakers should consider using multilateral sanctions besides applying diplomatic strategies to minimise the impact on civilians. Finally, policymakers should support moderate candidates in Iranian elections to encourage positive political changes.