While the International Relations literature has long debated whether or not economic sanctions are an effective foreign policy tool, it neglects to empirically examine the damage sanctions impose on target economies. This study presents two theoretical explanations about the impact of sanctions on target countries’ economies, and collects extensive empirical data to test such theoretical connections in three areas: international trade; foreign direct investment; and foreign portfolio investment. A cross-national, time-series data analysis of 133 countries during the period from 1970 to 2005 reveals that regardless of the number of senders, the type of sanctions or the level of anticipated costs to the target and the sender, economic coercion damages none of the economic conditions of the target. This finding suggests that if the objective is to maximize economic pain in the sanctioned country, a sanctioning country should think twice before choosing economic coercion as its primary non-military strategy.