Paper - Middle East Initiative

Sanctions and Export Deflection: Evidence from Iran

| January 2017

Note

This paper is a part of the Middle East Initiative Research Series, which presents the work of MEI Research Fellows, Harvard Faculty Research Grant Recipients, and other MEI research affiliates. View the full series here.

Jamal Ibrahim Haidar Working Paper Cover

Abstract

Do export sanctions cause export deflection? Data on Iranian non-oil exporters between January 2006 and June 2011 shows that two-thirds of these exports were deflected to non-sanctioning countries after sanctions were imposed in 2008, and that at this time aggregate exports actually increased. Exporting firms reduced prices and increased quantities when exporting to a new destination, however, and suffered welfare losses as a result.

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For Academic Citation: Haidar, Jamal. “Sanctions and Export Deflection: Evidence from Iran.” Paper, Middle East Initiative, January 2017.