A/HRC/28/59 objectives, including rewarding the loyalty of regime insiders, self-enrichment and financing the coercive apparatus.21 27. Increases and decreases in external financing can impact human rights in various ways. There are obviously cases in which foreign (including financial) investments can actually benefit the enjoyment of social and economic rights or promote the virtuous circle of growth and democratization, fostering greater respect for civil and political rights, but additional financing can also have the reverse effect. Debates on the effectiveness of international sanctions reflect the existing uncertainty as to whether reduced lending or economic support will lead to the desired policy outcomes, including better respect for human rights.22 There are several examples in which sanctions limiting foreign investments contributed to a reduction in repression, but sanctions have also sometimes pushed regimes into intensified repression. The matrix below provides a framework highlighting the potential effects loans provided to an authoritarian regime may have on human rights. Frequently those effects will be mixed. Interlinks between finance and human rights, possible scenarios More human rights violations Fewer human rights violations More funds Strengthen the regime, free up funds for criminal purposes Promote the circle of growth and democratization or directly benefit the people Fewer funds Provoke instability and subsequently more repression Weaken the regime and open up a democratic transition 28. Cutting off loans can destabilize authoritarian regimes, but whether increased repression will ensue is a more complex question. Two different outcomes are possible: when a regime faces financial constraints and cuts the resources for its population, dissent may occur and the regime may retaliate with elevated repression in the short term. Social and economic instability can beget escalation effects, radicalization of opposition groups and even defections from the security forces. The alternative scenario is that financial difficulties actually reduce repression, because the State has less financial capacity to operate its repressive apparatus, thus reducing the medium- and long-term sustainability of the regime, and ultimately shortening its political life. In sum, refraining from lending to a regime may have negative or positive outcomes depending on those different chains of causality. There are trade-offs between buying loyalty and repression and the regime may be unable to find a sustainable equilibrium between those two options. 29. It should be noted that gross human rights violations are increasingly committed in failed States or in the context of weak government structures. A further withdrawal of lending to weak or failing States could therefore cause further harm, as in such contexts the loss of administrative capacity and the lack of effectiveness of law enforcement by the State is a fertile ground for human rights abuses by private individuals or rogue agents of the 21 22 10 William Easterly, “How did heavily indebted poor countries become heavily indebted? Reviewing two decades of debt relief”, World Development, vol. 30, No. 10 (2002). See Joy Gordon, “Smart sanctions revisited”, Ethics & International Affairs, vol. 25, No. 3 (Fall 2011); David Lektzian and Mark Souva, “An institutional theory of sanctions onset and success”, Journal of Conflict Resolution, vol. 51, No. 6 (December 2007); William H. Kaempfer, Anton D. Lowenberg and William Mertens, “International economic sanctions against a dictator”, Economics and Politics, vol. 16, No. 1 (March 2004); and Dursun Peksen, “Better or worse? The effect of economic sanctions on human rights”, Journal of Peace Research, vol. 46, No. 1 (January 2009).