Year: 2025
Type: article
Abstract: This essay argues that the United States’ expansive use of financial sanctions—leveraging dollar-clearing chokepoints and global networks—has paradoxically accelerated pressures toward the erosion of the liberal economic order. As sanctions proliferate, targets move from short-term evasion to building alternative infrastructures, such as China’s RMB settlement system (CIPS), BRICS financial mechanisms, central bank digital currencies (CBDCs), and barter-based trade, thereby fostering governance decoupling from US-led systems. Drawing on structural power and institutionalist insights, I show how sanctions catalyze parallel economic ecosystems that fragment the financial architecture and, over time, erode US leverage and dollar centrality—even as the dollar remains dominant. I emphasize heterogeneous switching costs, with near-term change concentrated in the “plumbing” (messaging, clearing, legal venue) rather than in core reserve functions, and sketch two possible futures-bifurcated rival blocs versus pluralistic coexistence—calling on scholars and policymakers to rethink coercive statecraft in light of sanctions’ long-term institutional legacies.
Source: International Organization
Author: Dongan Tan
Institution: Texas Tech University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,550
OpenAlex ID: W4416381125