Public Reaction on Trade Sanctions in a Democratic Context: Evidence from Moldovan Wine Embargo

Abstract: Economic, and in particular trade sanctions are frequently used to punish non-compliant behavior in international politics. However, not enough is known on how these sanctions affect public opinion and popular preferences. Do people blame their government for the suffering inflicted by sanctions, or they rally ‘round the flag in defiance of foreign attempts to influence actions of their governments? In addition, worsening economic opportunities at home are likely to cause labor migration abroad, thus exposing migrants to foreign institutions, which might affect their positions on domestic political issues. Research of this problem is additionally challenged by the fact that sanctions are typically imposed on autocracies, which might manipulate public opinion. In this paper, I study a case of Russian-imposed trade sanctions on a democratic post-Soviet country. In 2006, Russia banned import of wines from Moldova, which has been widely perceived as an attempt to punish the Moldovan government for its increasingly pro-European course. Russia was the single largest consumer of Moldovan wines, amounting to 75 percent of export in 2005. Combining data from 2004 and 2014 population censuses, 1998-2010 elections results across 848 communes, and the pre-2006 spatial distribution of vineyards across Moldova, I show that, after the embargo, the prevalence of vineyards in a district is associated with the increase in share of residents choosing Romanian rather than Moldovan ethnic identity, a sign of pro-Western political and cultural orientation, and with the decrease in the vote share of the Party of Communists, the major pro-Russian political force in Moldova at the moment. The effect likely operated through the increased labor and educational migration to the Western countries. Therefore, the theories of “rally ‘round the flag” and the diffusion of democracy through international migration seem to explain the reaction of Moldovans to the Russian embargo.