Sanctions at bay? Hegemonic decline, multinational corporations, and U.S. economic sanctions since the pipeline case

Abstract

One of the lessons drawn by many scholars from the 1982 U.S. sanctions against the Soviet-European gas pipeline was that the decline of American hegemony and the global spread of American business placed the overseas networks of U.S. multinational corporations beyond the control of the U.S. government for the purposes of economic sanctions. Through systematically examining three subsequent sanctions efforts (Nicaragua, Libya, and South Africa), this study qualifies the generalizability of this “lesson.” In none of the cases was the United States willing to incur alliance costs through applying extraterritorial controls, nor was it able to persuade American firms to substitute public preferences for private ones. Nonetheless, in each case, the U.S. government influenced corporate decision making by augmenting corporate perceptions of risk so that prudent business stategies reinforced diplomatic preferences.