Experience open to interpretation: US presidents and economic coercion
2026-03-18
Research offers conflicting accounts of the effect of economic sanctions on the popularity of political leaders, suggesting that the public either rewards an active foreign policy or punishes the use of coercion. Moreover, scholarship assumes that political leaders do not observe ambiguous signals from the public and read the changes of public opinion in an unbiased fashion. Yet, literature on belief formation and on difficulties political leaders have with reading public preferences suggests that policy leaders may be susceptible to confirmation bias in respect to audience effects of sanctions. In this article, I develop a formal model of the behaviour of political leaders with respect to sanctions in an environment in which signals from the public are open to interpretation. I predict that US presidents are likely to anticipate a benefit resulting from sanctions imposition and engage in coercion when approval ratings are decreasing. I test the theory using an event study design and data on approval ratings of US presidents. The empirical analysis identifies an anticipation effect for US presidents, with lower approval ratings prior to imposition of economic sanctions. Additionally, I observe weak evidence in support of audience benefits following imposition of sanctions.