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Cross-efficiency of international sanctions: Application of Data Envelopment Analysis and Network Methodology
In this paper we provide methodology for evaluating e↵ec-tiveness of international sanctions using Data Envelopment Analysis(DEA). DEA is a non-parametric technique used to compare perfor-mance of similar units, such as departments or organizations. DEA haswide applications in all industries, and has been successfully used tocompare performance of hospitals, banks, universities, etc. The most im-portant advantage of this technique is that it can handle multiple inputand output variables, even those not generally comparable to each other.We use the ”Threat and Imposition of Sanctions (TIES)” Data 4.0 foranalysis. This database contains the largest number of cases (1412 from1945 to 2005) of international sanctions imposed on some countries onothers, takes into account simultaneous sanction imposition, and also es-timates the cost of all sanctions - both for those who receive and thosewho impose them. As input variables for DEA model we use the impactof institutions on sanctions, type of issue, threat, economic embargo, andsanction type. As the output variable, we use the outcome of sanctions forsenders and receivers. We describe how to use DEA cross-eciency out-puts to build the network of sanction episodes. Our methodology allowsus to cluster sanction episodes depending on their outcomes, and pro-vides explanations of higher eciency of one group of sanction episodesover the others.