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.
AfesorgborSylvanus K.2019. “The Impact of Economic Sanctions on International Trade: How do Threatened Sanctions Compare with Imposed Sanctions?” European Journal of Political Economy56: 11-26.
2.
AlBassamBassam A.2013. “The Relationship Between Governance and Economic Growth During Times of Crisis.” European Journal of Sustainable Development2 (2): 1.
3.
AldrichDaniel P.2012. Building Resilience: Social Capital in Post-disaster Recovery. University of Chicago Press.
4.
AlfaroLauraChandaAreendamKalemli-OzcanSebnemSayekSelin. 2004. “FDI and Economic Growth: the Role of Local Financial Markets.” Journal of International Economics64 (1): 89–112.
5.
AlfaroLauraKalemli-OzcanSebnemSayekSelin. 2009. “FDI, Productivity and Financial Development.” The World Economy32 (1): 111–35.
6.
AllenSusan Hannah. 2008a. “The Domestic Political Costs of Economic Sanctions.” Journal of Conflict Resolution52 (6): 916–44.
7.
AllenSusan Hannah. 2008b. “Political Institutions and Constrained Response to Economic Sanctions.” Foreign Policy Analysis4 (3): 255–74.
8.
AllenSusan HannahWebbClayton McLaughlin. 2025. “Recovering from Economic Coercion: Does the Pain Stop when Sanctions End?” Journal of Peace Research62: 1–15.
9.
AndreasPeter. 2005. “Criminalizing Consequences of Sanctions: Embargo Busting and its Legacy.” International Studies Quarterly49 (2): 335–60.
10.
AttiaHanaGrauvogelJulia. 2023. “International Sanctions Termination, 1990-2018: Introducing the IST Dataset.” Journal of Peace Research60 (4): 709–19.
11.
AttiaHanaGrauvogelJuliavon SoestChristian. 2020. “The Termination of International Sanctions: Explaining Target Compliance and Sender Capitulation.” European Economic Review129: 103565.
12.
BakDaeheeLeeHoonBiglaiserGlen. 2025. “The Role of Foreign Direct Investment in Post-Conflict Economic Recovery and Peace-Building.” Foreign Policy Analysis21 (1): orae032.
13.
BaldwinDavid A.2020. Economic Statecraft: New Edition. Princeton: Princeton University Press.
14.
BapatNavin AMorganT Clifton. 2009. “Multilateral Versus Unilateral Sanctions Reconsidered: a Test Using New Data.” International Studies Quarterly53 (4): 1075–94.
15.
BapatNavin AHeinrichTobiasKobayashiYoshiharuMorganT Clifton. 2013. “Determinants of Sanctions Effectiveness: Sensitivity Analysis Using New Data.” International Interactions39 (1): 79–98.
16.
BarroRobert JSala i MartinXavier. 2004. Economic Growth. 2nd ed. The MIT Press.
17.
BarryFrankBerginAdele. 2019. “Export Structure, FDI and the Rapidity of Ireland’s Recovery from Crisis.” Economic and Social Review50 (4): 707–24.
18.
BeckNathanielKatzJonathan NTuckerRichard. 1998. “Taking Time Seriously: Time-Series-Cross-Section Analysis with a Binary Dependent Variable.” American Journal of Political Science42 (4): 1260–88.
19.
BergeijkPeter A. G. Van. 1989. “Success and Failure of Economic Sanctions.” Kyklos42 (3): 385–404.
20.
BesedešTiborGoldbachStefanNitschVolker. 2017. “You’re Banned! the Effect of Sanctions on German cross-border Financial Flows.” Economic Policy32 (90): 263–318.
21.
BiglaiserGlenLektzianDavid. 2011. “The Effect of Sanctions on US Foreign Direct Investment.” International Organization65 (3): 531–51.
22.
BlattmanChristopherMiguelEdward. 2010. “Civil War.” Journal of Economic Literature48 (1): 3–57.
23.
BlomstromMagnus. 1991. “Host Country Benefits of Foreign Investment.” In NBER Working Paper Series 3615 National Bureau of Economic Research.
24.
BloomNicholas. 2009. “The Impact of Uncertainty Shocks.” Econometrica77 (3): 623–85.
25.
BolksSean MAl-SowayelDina. 2000. “How Long do Economic Sanctions Last? Examining the Sanctioning Process Through Duration.” Political Research Quarterly53 (2): 241–65.
26.
BonettiShane. 1994. “The Persistence and Frequency of Economic Sanctions.” In The Economics of International Security: Essays in Honour of Jan Tinbergen, 183–93. Springer.
27.
BoyceJames K.2011. “Post-Conflict Recovery: Resource Mobilization and Reconstruction.” In Securing Peace, edited by Kozul-WrightRichardFortunatoPiergiuseppe. London: Bloomsbury Academic.
28.
BreuerAdelaLesconi-FrumuşanuNătălița-MihaelaBilianaciureaJeanina. 2010. “Investments and Economic Recovery.” Annals of the University of Petroşani - Economics10 (1): 29–36.
29.
BrinkerhoffDerick W.2005. “Rebuilding Governance in Failed States and Post-conflict Societies: Core Concepts and cross-cutting Themes.” Public Administration and Development25 (1): 3–14.
30.
BrinkerhoffDerick W., ed. 2007. Governance in Post-conflict Societies. Taylor & Francis.
31.
ButkiewiczJames LYanikkayaHalit. 2006. “Institutional Quality and Economic Growth: Maintenance of the Rule of Law or Democratic Institutions, or Both?” Economic Modelling23 (4): 648–61.
32.
CollierPaulHoefflerAnke. 2004a. “Aid, Policy and Growth in Post-conflict Societies.” European Economic Review48 (5): 1125–45.
33.
CollierPaulHoefflerAnke. 2004b. “Greed and Grievance in Civil War.” Oxford Economic Papers56 (4): 563–95.
CravenMatthew. 2002. “Humanitarianism and the Quest for Smarter Sanctions.” European Journal of International Law13 (1): 43–61.
36.
CrozetMatthieuHinzJulian. 2020. “Friendly Fire: the Trade Impact of the Russia Sanctions and Counter-sanctions.” Economic Policy35 (101): 97–146.
37.
Dashti-GibsonJalehDavisPatriciaRadcliffBenjamin. 1997. “On the Determinants of the Success of Economic Sanctions: An Empirical Analysis.” American Journal of Political Science41 (2): 608–18.
38.
DavidAntonio CRodrigues BastosFabianoMillsMarshall. 2011. Post-Conflict Recovery: Institutions, Aid, or Luck?Working paper IMF, African Department.
39.
DebarreAlice. 2022. Making Sanctions Smarter: Safeguarding Humanitarian Action. International Peace Institute.
40.
DorussenHanMoJongryn. 2001. “Ending Economic Sanctions: Audience Costs and rent-seeking as Commitment Strategies.” Journal of Conflict Resolution45 (4): 395–426.
41.
DoxeyMargaret. 1980. “Economic Sanctions: Benefits and Costs.” The World Today36 (12): 484–89.
42.
DreznerDaniel W.2000. “Bargaining, Enforcement, and Multilateral Sanctions: when is Cooperation Counterproductive?” International Organization54 (1): 73–102.
43.
DreznerDaniel W.2003. “The Hidden Hand of Economic Coercion.” International Organization57 (3): 643–59.
DunningJohn H.1994. Reevaluating the Benefits of Foreign Direct Investment. Discussion Papers in International Investment and Business Studies. University of Reading, Department of Economics.
46.
EarlyBryan RSpiceRobert. 2015. “Economic Sanctions, International Institutions, and Sanctions Busters: when Does Institutionalized Cooperation Help Sanctioning Efforts?” Foreign Policy Analysis11 (3): 339–60.
47.
ElbadawiIbrahim AKaltaniLindaSchmidt-HebbelKlaus. 2008. “Foreign Aid, the Real Exchange Rate, and Economic Growth in the Aftermath of Civil Wars.” The World Bank Economic Review22 (1): 113–40.
48.
FelbermayrGabrielKirilakhaAleksandraSyropoulosConstantinosYalcinErdalYotovYoto V.. 2020. “The Global Sanctions Data Base.” European Economic Review129: 103561.
49.
FloresThomas EdwardNooruddinIrfan. 2009. “Democracy Under the Gun Understanding Postconflict Economic Recovery.” Journal of Conflict Resolution53 (1): 3–29.
50.
GaltungJohan. 1967. “On the Effects of International Economic Sanctions, with Examples from the Case of Rhodesia.” World Politics19 (3): 378–416.
51.
GharehgozliOrkideh. 2017. “An Estimation of the Economic Cost of Recent Sanctions on Iran Using the Synthetic Control Method.” Economics Letters157: 141–44.
52.
Ghorbani DastgerdiHamidrezaBinti YusofZarinahShahbazMuhammad. 2018. “Nexus Between Economic Sanctions and Inflation: a Case Study in Iran.” Applied Economics50 (49): 5316–34.
53.
GleditschNils PetterPeterWallensteenErikssonMikaelSollenbergMargaretaStrandHåvard. 2002. “Armed Conflict 1946-2001: a New Dataset.” Journal of Peace Research39 (5): 615–37.
54.
GutmannJergNeuenkirchMatthiasNeumeierFlorian. 2023. “The Economic Effects of International Sanctions: an Event Study.” Journal of Comparative Economics51 (4): 1214–31.
55.
HatipogluEmrePeksenDursun. 2018. “Economic Sanctions and Banking Crises in Target Economies.” Defence and Peace Economics29 (2): 171–89.
56.
HeCanfeiShengHantian. 2024. “Governance Capacity, Related Variety and Regional Economic Resilience Under the COVID-19 Epidemic: Evidence from China.” The Annals of Regional Science73: 1–31.
57.
HoefflerAnkeShahbano IjazSyedaVon BillerbeckSarah. 2011. Post-Conflict Recovery and Peacebuilding. World Bank.
58.
HufbauerGary CSchottJeffrey JElliottKimberly AOeggBarbara. 2007. Economic Sanctions Reconsidered. Washington, DC: Peterson Institute for International Economics.
59.
IanchovichinaElenaDevarajanShantayananLakatosCsilla. 2016. “Lifting Economic Sanctions on Iran: Global Effects and Strategic Responses.” In Policy Research Working Paper 7549 World Bank.
60.
International Monetary Fund. 1995. “Cameroon: Background Papers and Statistical Appendix.” IMF Staff Country Reports95 (5): 1.
61.
KaempferWilliam HLowenbergAnton D. 2007. “The Political Economy of Economic Sanctions.” In Handbook of Defense Economics, edited by SandlerToddHartleyKeith, 867–911. Elsevier.
62.
KaufmannDanielKraayAartMastruzziMassimo. 2011. “The Worldwide Governance Indicators: Methodology and Analytical Issues.” Hague Journal on the Rule of Law3 (2): 220–46.
63.
KhengVeasnaSunSizhongAnwarSajid. 2017. “Foreign Direct Investment and Human Capital in Developing Countries: a Panel Data Approach.” Economic Change and Restructuring50: 341–65.
64.
KirshnerJonathan. 1997. “The Microfoundations of Economic Sanctions.” Security Studies6 (3): 32–64.
65.
LeeHuay HuayTanHui Boon. 2006. “Technology Transfer, FDI and Economic Growth in the ASEAN Region.” Journal of the Asia Pacific Economy11 (4): 394–410.
66.
LektzianDavidBiglaiserGlen. 2013. “Investment, Opportunity, and Risk: Do US Sanctions Deter or Encourage Global Investment?” International Studies Quarterly57 (1): 65–78.
67.
LektzianDavidSouvaMark. 2001. “Institutions and International Cooperation: An Event History Analysis of the Effects of Economic Sanctions.” Journal of Conflict Resolution45 (1): 61–79.
68.
LektzianDavidSouvaMark. 2003. “The Economic Peace Between Democracies: Economic Sanctions and Domestic Institutions.” Journal of Peace Research40 (6): 641–60.
69.
LevyPhilip I.1999. “Sanctions on South Africa: what Did They Do?” The American Economic Review89 (2): 415–20.
70.
LiuZhiqiang. 2008. “Foreign Direct Investment and Technology Spillovers: Theory and Evidence.” Journal of Development Economics85 (1-2): 176–93.
71.
MarinovNikolay. 2005. “Do Economic Sanctions Destabilize Country Leaders?” American Journal of Political Science49 (3): 564–76.
72.
MarshallMonty GGurrTed Robert. 2020. “Polity5: Political Regime Characteristics and Transitions, 1800-2018.” Center for Systemic Peace2.
73.
MartinRonSunleyPeter. 2015. “On the Notion of Regional Economic Resilience: Conceptualization and Explanation.” Journal of Economic Geography15 (1): 1–42.
74.
MatznerAnnaMeyerBirgitOberhoferHarald. 2023. “Trade in Times of Uncertainty.” The World Economy46 (9): 2564–97.
75.
McGillivrayFionaStamAllan C. 2004. “Political Institutions, Coercive Diplomacy, and the Duration of Economic Sanctions.” Journal of Conflict Resolution48 (2): 154–72.
76.
McLeanElena VWhangTaehee. 2010. “Friends or Foes? Major Trading Partners and the Success of Economic Sanctions.” International Studies Quarterly54 (2): 427–47.
77.
MichieJonathan. 2001. The Impact of Foreign Direct Investment on Human Capital Enhancement in Developing Countries. Report OECD Paris.
78.
MilioSimona. 2008. “How Political Stability Shapes Administrative Performance: the Italian Case.” West European Politics31 (5): 915–36.
79.
MirkinaIrina. 2018. “FDI and Sanctions: An Empirical Analysis of short-and long-run Effects.” European Journal of Political Economy54: 198–225.
80.
ModyAshoka. 2004. “Is FDI Integrating the World Economy?” The World Economy27 (8): 1195–1222.
81.
MulderNicholas. 2022. The Economic Weapon: The Rise of Sanctions as a Tool of Modern War. Yale University Press.
82.
NeuenkirchMatthiasNeumeierFlorian. 2015. “The Impact of UN and US Economic Sanctions on GDP Growth.” European Journal of Political Economy40: 110–25.
83.
NicolasFrançoise. 2003. “FDI as a Factor of Economic Restructuring: the Case of South Korea.” In International Trade, Capital Flows and Economic Development in East Asia: The Challenge in the 21st Century, edited by Bende-NabendeAnthony. Ashgate.
84.
NorthDouglass C.1989. “Institutions and Economic Growth: An Historical Introduction.” World Development17 (9): 1319–32.
ÖzdamarÖzgürShahinEvgeniia. 2021. “Consequences of Economic Sanctions: The State of the Art and Paths Forward.” International Studies Review23 (4): 1646–71.
87.
O’ReillyColin. 2014. “Investment and Institutions in Post-civil War Recovery.” Comparative Economic Studies56: 1–24.
88.
PakOlgaKretzschmarGavin Lee. 2016. “Western sanctions—Only Half the Challenge to Russia’s Economic Union.” Research in International Business and Finance38: 577–92.
89.
PapeRobert A.1997. “Why Economic Sanctions Do Not Work.” International Security22 (2): 90–136.
90.
PeksenDursun. 2019. “When Do Imposed Economic Sanctions Work? A Critical Review of the Sanctions Effectiveness Literature.” Defence and Peace Economics30 (6): 635–47.
91.
PouPedro. 2000. “Argentina’s Structural Reforms of the 1990s.” Finance & Development37 (1): 13.
92.
RaynorBenjamin. 2022. “The Shadow of Sanctions: Reputational Risk, Financial Reintegration, and the Political Economy of Sanctions Relief.” European Journal of International Relations28 (3): 696–721.
93.
RubinClaire BBarbeeDaniel G. 1985. “Disaster Recovery and Hazard Mitigation: Bridging the Intergovernmental Gap.” Public Administration Review45: 57–63.
SikodFondoTekeJohn Nde. 2012. “Governance and Economic Growth in Cameroon. Research Paper 250 African Economic Research Consortium.
96.
SinghBhanu PratapPradhanKailash Chandra. 2022. “Institutional Quality and Economic Performance in South Asia.” Journal of Public Affairs22 (1): e2401.
97.
SungeRegretMudzingiriCalvinMkhizeNkosingiphile. 2024. “The COVID-19 Pandemic and Economic Recovery: the Mediating Role of Governance, a Global Perspective.” Heliyon.
98.
TanDongan. 2025. “The Causal Effect of Economic Sanctions on Political Stability: a two-stage difference-in-differences Analysis.” International Journal of Social Welfare34 (1): e12707.
99.
TanDonganLaHoan. 2025. “Replication Data for: ‘The Determinants of Post-Sanctions Economic Recovery’ published in the Journal of Conflict Resolution (JCR).” doi: 10.7910/DVN/7WE9FZ.
100.
ValerianiElisaPelusoSara. 2011. “The Impact of Institutional Quality on Economic Growth and Development: an Empirical Study.” Journal of Knowledge Management, Economics and Information Technology1 (6): 1–25.
101.
van BergeijkPeter AGBierstekerThomas. 2015. “How and when Do Sanctions Work? the Evidence.” In On Target? EU Sanctions as Security Policy Tools, edited by DreyerIanaLuengo-CabreraJosé. European Union Institute for Security Studies.
102.
van BergeijkPeter A. G.MarrewijkCharles van. 1995. “Why Do Sanctions Need Time to Work? Adjustment, Learning and Anticipation.” Economic Modelling12 (2): 75–86.
103.
van BergeijkPeter A. G.van MarrewijkCharles. 1994. “Economic Sanctions: a Hidden Cost of the New World Order.” In The Economics of International Security: Essays in Honour of Jan Tinbergen, edited by ChatterjiManasJagerHenkRimaAnnemarie, 168–82. Springer.
104.
van Popering-VerkerkJitskeMolenveldAstridDuijnMichaelLeeuwenCorniel vanBuurenArwin van. 2022. “A Framework for Governance Capacity: a Broad Perspective on Steering Efforts in Society.” Administration & Society54 (9): 1767–94.
105.
WandedaDickson OMasaiWafulaNyandemoSamuel M. 2021. “Institutional Quality and Economic Growth: Evidence from Sub-Saharan Africa Countries.” African Journal of Economic Review9 (4): 106–25.
106.
WeissThomas George. 1997. Political Gain and Civilian Pain: Humanitarian Impacts of Economic Sanctions. Rowman & Littlefield.
ZisuhNgoasong Michael. 2003. “The Role of Foreign Direct Investment on Export Performance in Cameroon.” https://ia-forum.org/Files/OSJDQW.pdf. Accessed: 2025-08-07.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
