Economic sanctions, by restricting access to financial resources, international markets, and formal supporting institutions, have exposed the operating environment of economic enterprises in Iran to heightened uncertainty and increased transaction costs. In this context, trust companies—defined as firms based on institutional trust and non-conventional contractual relationships—have come to play an increasingly important role in sustaining economic activities and facilitating global trade.
The objective of this article is to examine the role of institutional innovations in improving the performance of trust companies as a fundamental strategy for managing Iran’s economy under sanctions. The research adopts a descriptive–analytical method grounded in the New Institutional Economics approach. Using documentary analysis, selected case studies, and the theoretical framework of transaction cost economics, the study investigates the institutional mechanisms that influence the performance of these companies.
The findings indicate that institutional innovations—such as enhancing controlled transparency and corporate governance within trust companies; reducing concentration and diversifying trust structures; aligning trust companies with minimum international standards; linking trust companies with alternative instruments such as barter, cryptocurrencies, and special purpose vehicles (SPVs); strengthening the legal and professional expertise of human capital within these firms; and moving toward coherent and coordinated policymaking—can, on the one hand, reduce transaction costs for economic enterprises, manage sanctions-related risks, facilitate the business environment, and ultimately contribute to improved economic growth, while on the other hand increasing the operational resilience of trust companies themselves.
Accordingly, improving the performance of trust companies in Iran requires moving beyond a purely instrumental and short-term perspective toward an approach centered on risk management, structural diversification, and institutional synergy. Only under such conditions can these companies transform their role from a high-risk and unstable tool into a complementary and controllable mechanism within a sanctions-constrained economy, and be considered by policymakers as an effective policy strategy for enhancing the efficiency of both public and private enterprises in sanctioned economies.