The Effects of International Sanctions on External Debt

In this study, the effects of international sanctions imposed by the United States (US) and multinationalinstitutions (European Union (EU) and the United Nations (UN)) on the external debts of less developed or/anddeveloping countries are empirically assessed. Our sample includes 44 countries experienced internationalsanctions over the period 1976-2014. According to the results, the sanctions significantly increase the externaldebt of the target country. Moreover, if the targeted countries increase government expenditures against thesesanctions, it is seen that the tendency of these sanctions to increase external debt is lower in sanctioned periods.Adding to these, the effect of the type of regime in targeted countries on external debt varies according to thestate of government expenditures.