Does the involvement of foreign third parties in the management of a country in the wake of a civil war have positive or negative economic effects? The approaches used to address this question in the social and political science literature are mostly qualitative and not sufficiently supported by quantitative evidence. This paper uses a quantitative analysis of the postconflict economic performance of Kosovo and East Timor under international administrations sponsored by the United Nations in the late 1990s. By using the synthetic control impact evaluation technique, we compute suitable counterfactual scenarios for each country to estimate the intervention effects of interest. We find a robust negative effect from the intervention on Kosovo, whereas the effect on East Timor is positive.
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We are grateful to Alberto Abadie, Farid Kahhat, Alonso Gurmendi, Roberto Heimowitz, Pablo Lavado, and participants at the 2015 Annual Congress of the Peruvian Economic Association and at research seminars held by the Central Reserve Bank of Peru for useful comments. We also thank two anonymous referees, whose insightful suggestions have enriched the content and presentation of this paper. We gratefully acknowledge the financial support of the Universidad del Pacifico Research Center. We alone are responsible for the views expressed and for any errors that may remain in this paper. Contact the corresponding author, Diego Winkelried, at email@example.com.