Starting with this chapter, we shift our attention to the threat or use of economic sanctions as a means of securing policy concessions. Doing so is critical to investigating our assertion that sanctions and incentives are subject to a similar logic and work under similar circumstances. In contrast, others have noted that economic incentives are more likely to influence states than sanctions, since incentives are non-coercive and consequently do not provoke the target to harden its position or produce rally-around-the-flag effects.1 Conversely, prospect theory suggests that states will respond more readily to sanctions than incentives because states are motivated less by prospective gains than by prospective losses.2 This and the next two chapters will enable us to judge which of these three perspectives is correct. Unlike in the previous case studies, demands by the Arab League that Canada retreat from its plan to move the Canadian embassy in Israel from Tel Aviv to Jerusalem did not involve a challenge to a target state’s sovereignty, security, or territorial interests. Therefore, this case cannot by itself provide much insight into the validity of the realist model (R). In comparison with other cases, however, it will allow us to consider how variation in the political salience of the sender’s demands affects the likelihood of success. Arab League sanctions, which threatened lucrative Canadian contracts in the Arab world, Canadian access to OPEC oil, Arab foreign investment in Canada, and even Canadian currency stability, were of great potential economic importance, so an Arab League failure to influence Canada in this case would be problematic for commercial liberal model (CL). Nonetheless, since the economic effects were less vital than American aid for an economically constrained Jordan or Japanese aid to an economically destitute Soviet Union, it will allow us to make crosscase comparisons in our concluding chapter about the importance of the magnitude of economic statecraft in strictly economic terms. Regarding model CR, since Canada was a democratic state, Arab policy success would present a challenge to its regime-type logic. We compare each of these models to our own approach, focusing on Canadian TSI and stateness.