The Impact of Sanctions on Corruption and Black Markets

Sanctions, regardless of their intended purpose, often lead to increased corruption and the proliferation of black market activities within the target economy. As governments impose restrictions on trade and finance, individuals and groups are incentivized to find alternative means to sustain their livelihoods, resulting in illicit markets that can thrive under such conditions. For instance, in Venezuela, sanctions instigated cooperation between countries like Iran and Russia, helping Venezuela circumvent sanctions by establishing illicit channels for oil processing and trade. This corruption creates a legacy in the affected nation, where these networks persist long after the sanctions are lifted, complicating future economic recovery and stability.