IDEAS home Printed from https://ideas.repec.org/a/sae/jocore/v70y2026i4p720-747.html

The Determinants of Post-Sanctions Economic Recovery

Author

Listed:
  • Dongan Tan
  • Hoan La

Abstract

Why do some countries recover swiftly after economic sanctions are lifted, while others face prolonged stagnation? Despite extensive research on the initiation and effectiveness of sanctions, their aftermath remains understudied. This study develops a theoretical framework to explain post-sanctions economic recovery, focusing on three key determinants: domestic institutional quality, international investment, and sanctions characteristics. Using duration analysis on data from 1960 to 2023, we find that government effectiveness accelerates long-term recovery, while foreign direct investment drives short-term rebounds. Sanctions characteristics yield mixed results: sanction costs show no significant effect, while success and duration are associated with slower recovery. These findings contribute to a broader understanding of how states rebuild after economic disruption, highlighting the role of institutional resilience and external economic reintegration. By bridging the gap between sanctions and economic resilience research, this study provides insights for policymakers seeking to mitigate long-term economic costs and design more effective recovery strategies.

Suggested Citation

  • Dongan Tan & Hoan La, 2026. "The Determinants of Post-Sanctions Economic Recovery," Journal of Conflict Resolution, Peace Science Society (International), vol. 70(4), pages 720-747, April.
    • Handle: RePEc:sae:jocore:v:70:y:2026:i:4:p:720-747
    DOI: 10.1177/00220027251372059
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/00220027251372059
    Download Restriction: no
    File URL: https://libkey.io/10.1177/00220027251372059?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gutmann, Jerg & Neuenkirch, Matthias & Neumeier, Florian, 2023. "The economic effects of international sanctions: An event study," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1214-1231.
    2. Attia, Hana & Grauvogel, Julia & von Soest, Christian, 2020. "The termination of international sanctions: explaining target compliance and sender capitulation," European Economic Review, Elsevier, vol. 129(C).
    3. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2007. "Economic Sanctions Reconsidered, 3rd edition (hardcover)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4075, January.
    4. Elisa Valeriani & Sara Peluso, 2011. "The Impact Of Institutional Quality On Economic Growth And Development: An Empirical Study," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(6), pages 1-25, October.
    5. Liu, Zhiqiang, 2008. "Foreign direct investment and technology spillovers: Theory and evidence," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 176-193, February.
    6. Butkiewicz, James L. & Yanikkaya, Halit, 2006. "Institutional quality and economic growth: Maintenance of the rule of law or democratic institutions, or both?," Economic Modelling, Elsevier, vol. 23(4), pages 648-661, July.
    7. Afesorgbor, Sylvanus Kwaku, 2019. "The impact of economic sanctions on international trade: How do threatened sanctions compare with imposed sanctions?," European Journal of Political Economy, Elsevier, vol. 56(C), pages 11-26.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jerg Gutmann & Matthias Neuenkirch & Florian Neumeier, 2024. "Political Economy of International Sanctions," Research Papers in Economics 2024-07, University of Trier, Department of Economics.
    2. Gutmann, Jerg & Langer, Pascal & Neuenkirch, Matthias, 2024. "International sanctions and emigration," Journal of Economic Behavior & Organization, Elsevier, vol. 226(C).
    3. Magoum Tedom, Ornela Amelie & Ondo, Assoumou & Keneck-Massil, Joseph, 2025. "International aid held hostage by international sanctions," International Economics, Elsevier, vol. 184(C).
    4. Simola, Heli, 2023. "What the literature says about the effects of sanctions on Russia," BOFIT Policy Briefs 8/2023, Bank of Finland Institute for Emerging Economies (BOFIT).
    5. Jerg Gutmann & Matthias Neuenkirch & Florian Neumeier, 2024. "Do China and Russia undermine Western sanctions? Evidence from DiD and event study estimation," Review of International Economics, Wiley Blackwell, vol. 32(1), pages 132-160, February.
    6. Görg, Holger & Jacobs, Anna & Meuchelböck, Saskia, 2024. "Who is to suffer? Quantifying the impact of sanctions on German firms," Journal of Economic Behavior & Organization, Elsevier, vol. 228(C).
    7. Mustafa Naimoğlu & Serkan Şahin & Sefa Özbek, 2025. "Governance, Corruption, Trade Openness, and Innovation: Key Drivers of Green Growth and Sustainable Development in Türkiye," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(3), pages 4147-4162, June.
    8. Sylvanus Kwaku Afesorgbor & Lukas Kornher & Fabio G. Santeramo, 2025. "The Impacts of Economic Sanctions on Food (Prices) Security: Evidence From Targeted Countries," The World Economy, Wiley Blackwell, vol. 48(8), pages 1942-1956, August.
    9. Susan Hannah Allen & Clayton McLaughlin Webb, 2025. "Recovering from economic coercion: Does the pain stop when sanctions end?," Journal of Peace Research, Peace Research Institute Oslo, vol. 62(4), pages 1061-1075, July.
    10. Ali, Amjad, 2022. "Financial Liberalization, Institutional Quality and Economic Growth Nexus: Panel Analysis of African Countries," MPRA Paper 116101, University Library of Munich, Germany.
    11. Wandeda, Dickson O. & Masai, Wafula & Myandemo, Samuel M., 2021. "Institutional quality and economic growth: evidence from Sub-Saharan Africa countries," African Journal of Economic Review, African Journal of Economic Review, vol. 9(4), September.
    12. Apeti, Ablam Estel & Edoh, Eyah Denise, 2024. "Economic sanctions and sovereign debt default," European Journal of Political Economy, Elsevier, vol. 85(C).
    13. Vipin P. Veetil, 2026. "How Vulnerable is India's Economy to Foreign Sanctions?," Papers 2603.12128, arXiv.org, revised Mar 2026.
    14. Farzanegan, Mohammad Reza & Habibi, Nader, 2025. "The effect of international sanctions on the size of the middle class in Iran," European Journal of Political Economy, Elsevier, vol. 90(PB).
    15. Rok Spruk, 2026. "Confrontation with the West and Long-Run Economic and Institutional Outcomes: Evidence from Iran," Papers 2602.03231, arXiv.org.
    16. Jun Wen & Xinxin Zhao & Quan-Jing Wang & Chun-Ping Chang, 2021. "The impact of international sanctions on energy security," Energy & Environment, , vol. 32(3), pages 458-480, May.
    17. Demena, B.A. & Benalcazar Jativa, G. & Reta, A.S. & Kimararungu, P.B. & van Bergeijk, P.A.G., 2021. "Does research on economic sanctions suffer from publication bias?," ISS Working Papers - General Series 674, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    18. Nandnaba, Alfred Michel, 2025. "The dark political side of US economic sanctions: An overview of renewable energy production in developing countries," Energy, Elsevier, vol. 335(C).
    19. P. Okillong & J. Luwedde & A.K. Nattabi, 2025. "How do sanctions shape intra-African trade? Implications for AfCFTA implementation," Journal of Economic Policy and Management Issues, JEPMI, vol. 4(2), pages 36-48.
    20. Meyer, Klaus E. & Fang, Tony & Panibratov, Andrei Y. & Peng, Mike W. & Gaur, Ajai, 2023. "International business under sanctions," Journal of World Business, Elsevier, vol. 58(2).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jocore:v:70:y:2026:i:4:p:720-747. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.