Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214939 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7937
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We use the synthetic control method to estimate the effect of international banking and energy sanctions from 2012 to 2015 on military spending of Iran. We create a synthetic control group that mimics the socioeconomic characteristics of Iran before the international sanctions of 2012. We then compare the military spending of the counterfactual Iran without sanction to the factual Iran with sanction for the period of 2003-2015. Over the entire 2013–2015 period, per capita military spending was reduced by about 119 US$ per year on average, which amounts to approximately 54% of the 2012 baseline level. Our findings are robust to a series of tests, including placebo tests.
Subjects: 
sanctions
military spending
Iran
synthetic control methodology
JEL: 
F50
H56
N15
O19
Document Type: 
Working Paper
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