15.11.2026 New Devpolicy articles: How corruption shapes the consequences of economic sanctions

Professor Mohammad Reza Farzanegan examines the relationship between economic sanctions, corruption, and domestic conflict in two articles published on the Devpolicy Blog, with a particular focus on Iran.

The two-part series, titled “When sanctions meet corruption: Iran and the risk of conflict”, was published on 10 and 12 November 2026 by the Devpolicy Blog of the Development Policy Centre at the Australian National University.

The articles draw on a study co-authored with Mohamad Alkurdi Albarawi and published in the European Journal of Political Economy. Using panel data covering 122 countries between 1996 and 2020, the study finds that trade sanctions are associated with higher conflict-related fatalities in countries with greater pre-existing corruption. This positive association is not observed in countries with lower levels of corruption.

Part 1 explains how sanctions can create new opportunities for rent-seeking and the accumulation of wealth by politically connected actors in corrupt economies. Drawing on examples from Iran, Iraq, and Syria, the article discusses how economic restrictions may reinforce existing networks of political and economic privilege while imposing substantial costs on ordinary households and the middle class.

Part 2 examines how economic inequality, limited opportunities for upward social mobility, and declining trust in political institutions may contribute to social grievances and domestic instability. It also discusses policy implications, including more targeted sanctions, stronger monitoring of rent-seeking opportunities, and effective safeguards for humanitarian trade.

The central message is that the assessment and design of economic sanctions should consider the governance conditions of target countries and the distribution of economic costs and benefits, alongside the intended economic pressure.

Both articles are available online:

Part 1: When sanctions meet corruption: Iran and the risk of conflict
Part 2: When sanctions meet corruption: Iran and the risk of conflict

Underlying research publication:

Farzanegan, M. R., & Alkurdi Albarawi, M. (2026). Destabilizing the corrupt: Economic sanctions and their conflict-inducing consequences. European Journal of Political Economy, 95, 102885. https://doi.org/10.1016/j.ejpoleco.2026.102885