Chapter 24 Political Economy of Peacekeeping

The study of peacekeeping from an economics perspective is a fairly recent phenomenon. This chapter surveys three research areas pursued by economists in analyzing peacekeeping. The first research strand examines the theory and empirics of peacekeeping financing and burden sharing, while the second strand focuses on the efficacy of third-party intervention in reducing conflict. The last strand utilizes case studies to generalize on the economic consequences of peacekeeping on host nations. In general, the research shows that peacekeeping has a relatively large share of purely public benefits, which leads to a more sub-optimal allocation of resources to peacekeeping from a global perspective. The studies on third party intervention fail to provide definitive answers to the research question. Specifically, theoretical models on interventions showed that intervention may or may not result in the reduction of conflict since the strategic interactions among the warring parties and the intervener bring indirect impacts that are not always clear. The empirical studies were equally ambiguous. On the one hand, multi-dimensional peacekeeping/peace building missions tended to significantly improve the chances for peace, while traditional peacekeeping (such as observer mission) did not. More recent studies showed that intervention by international organizations was not a significant factor in reducing the duration of conflict, while others found early intervention by the UN to significantly reduce conflict. The final research question on the costs and benefits of peacekeeping was addressed through a case study on Haiti, a peacekeeping host nation. The analysis can be generalized to other peacekeeping host nations. For example, host nations may perceive the UN mission much as a military base is perceived in a small economically weak community, as a source of income and employment. This may lead to perverse incentive and increase instability if such an economic source is reduced or removed.