City I governed in recession, full of hope at first (5)
I believe the answer is:
delhi
'city' is the definition.
(I know that Delhi is a city)
'i governed in recession full of hope at first' is the wordplay.
'governed' becomes 'led' (lead can mean to govern or rule).
'in recession' says the letters should be written in reverse (letters recede or go back).
'full of' is an insertion indicator.
'at first' indicates taking the first letters.
The first letter of 'hope' is 'h'.
'i'+'led'='iled'
'iled' backwards is 'deli'.
'deli' placed around 'h' is 'DELHI'.
(Other definitions for delhi that I've seen before include "Capital on the river Jumna" , "Old city of north central India" , "Asian city" , "Ancient city" , "New -, Asian capital" .)