Economic sanctions are often used as a responsible compromise in foreign policy; they promise accountability without violence and put pressure on governments without requiring military occupation. In practice, sanctions consist of government-imposed restrictions on trade, finances, and overall economic activity, such as asset freezes, limits on access to international credit, and trade bans [1]. Sanctions are designed to put pressure on politicians while minimizing harm to ordinary citizens. The US has imposed sanctions on several Latin American countries, which have become an increasingly popular American measure used to control authoritarian rulers and slow democratic backsliding. Evidence suggests that sanctions fail to deliver the political reform they promise. Sanctions have destabilized economies, weakened civil society, and contributed to the consolidation of authoritarian rule.
Nicaragua is a prime example of how economic pressure from sanctions can disrupt societies and harmfully reshape political systems without producing real democratic reform. By the time the US expanded sanctions on Nicaragua in 2018, democracy had already been severely compromised, which indicates that sanctions were a response to authoritarian consolidation rather than a cause of democratic decline. President Daniel Ortega had successfully consolidated power by eroding checks and balances and, in 2014, removing term limits. Electoral processes lost credibility as opposition candidates were barred from running or imprisoned; political dissent, by candidates and citizens, became increasingly criminalized. The violent repression of protests in 2018 marked a turning point in which Nicaragua shifted from competitive authoritarianism, a system in which democratic institutions exist but are neither free nor fair, toward total political control [2]. This caused the US to impose targeted sanctions, asset freezes, and visa restrictions to promote democracy and human rights [3].
Sanctions work through economic systems rather than political institutions, and their effects can be difficult to measure and contain. Studies have shown that sanctions cause declines in GDP growth: UN sanctions reduce per capita GDP growth by roughly 2.3–2.5 percentage points per year, while US sanctions reduce growth by approximately 1–2 percentage points annually. Nicaragua reflects these broader patterns. Following the expansion of sanctions, unemployment nearly doubled, from 6.2% in 2019 to 10.3% in 2021, indicating substantial economic hardship for ordinary citizens [4]. These economic consequences undermine growth and increase poverty. US financial restrictions limited the country’s access to international credit markets and discouraged foreign investment, which increases overall economic insecurity and dependency on the government. Rather than weakening the regime, sanctions reshaped the relationship between civil society and the state. As economic options outside of the government’s control diminished, more and more citizens were forced to rely on state-run programs. This allowed the Ortega regime to consolidate power and use economic insecurity as a political weapon. External economic pressures also provided the Nicaraguan government with a uniquely useful narrative. US sanctions allowed the regime to frame repression as a necessary response to foreign interference; dissenters were labeled as conspirators with foreign enemies. This relationship allowed the government to justify authoritarian rule and behavior. The Ortega regime would likely have continued consolidating power even in the absence of sanctions. However, the important question is not whether sanctions caused authoritarianism, but whether they constrained it or instead created a scenario for it to thrive. In this case, sanctions, in part, created an environment in which authoritarianism could grow.
The case of Nicaragua exemplifies a pattern of US involvement in Latin America. While direct military intervention is uncommon, economic coercion continues to shape Latin American politics. Sanctions allow the US government to influence policy from afar while avoiding accountability for the ways its actions affect ordinary citizens. This similar dynamic can be seen in Venezuela, Cuba, and Iran, where US sanctions have historically existed, but authoritarian rule has remained in place [5]. Nicaragua is not an isolated incident, but rather shows how consistently ineffective sanctions are in achieving political change. This is not an argument for ignoring authoritarianism, but an argument for recognizing the risks and limitations of sanctions as a way to address it. Across several examples, sanctions have been shown to reduce economic growth and harm citizens [5]. If sanctions continue to be treated as the best response to authoritarianism, economies will crumble, and people will suffer, all while dictators remain in power.
