This dissertation investigates implementation problems in economic sanctions and how a state's concerns about policy implementation affect its decisions and the outcomes of sanctions. This study builds on the premise that sanctions are carried out by firms within a sanctioning state, not the state itself. First, using a game-theoretical model, I show that firms' non-compliance with sanction policies not only undermines the effectiveness of unilateral sanctions, but also has a counter-intuitive effect on a sanctioning state's decision to impose sanctions. The model suggests that a state is more likely to impose sanctions when it anticipates firms' non-compliance. A number of empirical implications are derived from the model and corroborated with data. Second, this study also investigates a sanctioning state's decision to sanction multilaterally or unilaterally, and how its expectations about the enforcement of sanctions influence this decision. When the enforcement of unilateral sanctions is expected to be difficult, the state is more likely to sanction multilaterally, but only when it has enough resources and the bureaucratic capability to help other states enforce their sanctions. The empirical evidence also buttresses these theoretical results. This study highlights the importance of incorporating expectations about enforcement into a full understanding of the sanctions processes. The conclusion is that states' ability to influence firms' decisions at home as well as abroad is a crucial determinant of whether they impose, how they design, and the effectiveness of sanctions.