Peacekeeping operations and shadow economy growth in host countries

Abstract

While a great deal of scholarship has been devoted to peacekeeping operations (PKOs), relatively few works have examined their economic effects. Toward better understanding this area of inquiry, we examine the impact of PKOs on the growth of the shadow economies of host countries. We posit that the conflict cessation brought about by peacekeeping missions, as well as their stimulative economic effects, will reduce the growth of the shadow sector. However, these impacts may not be sustainable after the conclusion of the mission. Testing these linkages across 145 countries for over 40 years, we find significant support for these dynamics.