Sanctions from a Political Economy Perspective: State Capacity, Regional Inequalities, and Consumer Welfare in Russia (2011-2024)

Economic sanctions are usually studied in small, import-dependent economies, leaving open how they reach consumers in a large, resource-rich state with the means to adapt. This paper pursues that question for Russia, using interrupted time-series analysis of monthly Rosstat and Central Bank of Russia data from 2011 to 2024 to compare the consumer-welfare effects of the 2014 and 2022 sanctions across prices, food affordability, and regional purchasing power. The two episodes differ sharply in magnitude. The 2022 measures raised the Consumer Price Index by roughly 120 index points (p < 0.001), about twenty times the 2014 effect, and lowered food affordability by some 286 index points, against 17 in 2014; ruble depreciation emerges as the main channel. The regional results are the more surprising. It was agricultural regions, not the major cities, that bore the deepest immediate losses after 2022, even as they recovered fastest, with domestic agricultural output a clear cushion. This overturns the expectation that cities suffer most and points instead to local economic structure and state capacity as what governs exposure and recovery. Sanctions thus impose real, regionally uneven welfare costs even on a large economy, which argues for regionally targeted safety nets and support for agricultural areas.