The economic effects of International Administrations: The cases of Kosovo and East Timor

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 are not sufficiently supported by quantitative evidence. This paper uses a quantitative analysis of the post-conflict economic performance of Kosovo and East Timor under UN-sponsored international administrations 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.