The Power of Money: Sanctions in Modern Diplomacy
By Maria Letizia Massa | 22nd of April, 2026 | 5 min
In today’s international relations, power is no longer measured only in terms of military strength, but is increasingly expressed through financial means. States are using economic tools to achieve diplomatic goals, and among these, sanctions have become one of the most visible and widely used. Beyond individual states, international organizations such as the United Nations also employ sanctions as a collective enforcement mechanism, to maintain or restore international peace and security.
As geopolitical tensions increase and cooperation becomes more difficult, states are relying more frequently on sanctions to pursue their foreign policy objectives. These measures can target a range of actors, from governments to terrorist groups and criminal networks, and take forms such as trade embargoes, asset freezes, travel bans, and restrictions on financial transactions and trade.
In recent years, their importance has been increasingly evident. Following Russia’s invasion of Ukraine in 2022, the G7 and its partners imposed coordinated sanctions aimed at freezing Russian foreign reserves, limiting access to global financial markets, and restricting the import of key technologies for military production. Rather than using direct military action, these countries applied sustained economic pressure to constrain Russia’s ability to finance and continue the war.
In modern diplomacy, sanctions have become a central instrument of economic statecraft and can be seen as a middle ground between diplomacy and force. When dialogue alone seems insufficient and military action too risky or costly, sanctions offer a way to respond. They allow states to signal disapproval, apply pressure gradually, and maintain control over escalation. However, the question remains: do sanctions actually work?
In some cases, sanctions can push countries towards negotiations. Sanctions on Iran’s financial sector and oil exports played a role in opening the space for negotiations, ultimately leading to the 2015 Iran Nuclear Deal, and continue to shape incentives for discussions today. Sanctions can also constrain specific behaviours. Export controls on Russia’s “dual-used” goods, imposed by the EU, US and their allies since 2022, limit Russia’s access to advanced technologies and limit its ability to sustain certain military capabilities. Beyond their direct impact, sanctions can send a symbolic message. EU and US sanctions on Belarus following the 2020 elections and subsequent repression of the peaceful protests, were designed to pressure the government to end violence, release political prisoners, and engage in dialogue. When imposed in response to human rights violations, sanctions send a clear message about what the international community considers unacceptable.
However, sanctions are far from a perfect tool. Their consequences can be unpredictable, and in some cases may even strengthen the regimes they are meant to pressure. Targeted countries can portray sanctions as evidence of foreign aggression, using them to fuel nationalist narratives and consolidate domestic support. Another challenge is their impact on ordinary citizens, as broad restrictions can worsen living conditions without changing government behaviour. For this reason, there is increasing reliance on “smart sanctions,” which target specific individuals or sectors, such as the asset freezes on Russian oligarchs, rather than entire economies. Sanctions are also criticised as being more symbolic than effective, allowing states to appear responsive without fundamentally changing outcomes. Yet even in these cases, their signalling can shape expectations and influence the behaviour of other states.
Ultimately, the effectiveness of sanctions depends on several factors, but the most important is coordination. Sanctions are more powerful when implemented collectively, otherwise, targeted states can find alternative partners and ways to circumvent them. The coordinated sanctions on Russia highlights the importance of international cooperation. Sanctions effectiveness, indeed, depends less on economic pressure alone and more on the ability of states to act together, share objectives, and sustain a common strategy over time.
Sanctions have become a crucial feature of modern diplomacy offering a way to respond to crises and influence behavior without military force. While they are not always effective and can produce unintended consequences, they remain one of the most important instruments available to states today. In a world of rising geopolitical tensions and weakening multilateralism, sanctions are likely to remain a first step in responding to international challenges.
Maria Letizia Massa is a 2st-year Economics and Management of Government and International Organizations student.
