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The Determinants of Post-Sanctions Economic Recovery

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  • 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
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