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Destabilizing the Corrupt: US Sanctions and Their Conflict-Inducing Consequences

Author

Listed:
  • Mohammad Reza Farzanegan
  • Mohamad Alkurdi Albarawi

Abstract

This study investigates the impact of U.S. economic sanctions on internal instability and conflict using a global sample. Our analysis, which includes cross-country and panel data from over 120 countries between 1996 and 2022, shows that economic sanctions increase the risk of internal conflict and political instability, but only in countries with high levels of public corruption. In contrast, sanctions have no significant effect on political stability in countries with lower levels of corruption. These results are robust across various model specifications, control variables, competing moderator, and alternative indicators of conflict. Our findings suggest that countries can strengthen their resilience to external financial pressures during sanctions by improving their control of corruption.

Suggested Citation

  • Mohammad Reza Farzanegan & Mohamad Alkurdi Albarawi, 2025. "Destabilizing the Corrupt: US Sanctions and Their Conflict-Inducing Consequences," CESifo Working Paper Series 11754, CESifo.
    • Handle: RePEc:ces:ceswps:_11754
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    More about this item

    Keywords

    global sanction; corruption; conflict; politicial instability;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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