The Economic Consequences of Us Interventions:an Empirical Inquiry

Abstract: We examine the economic consequences of US covert interventions undertaken to install and prop up political leaders in other countries during the Cold War period. To this point the absence of reliable information on covert interventions has served as an obstacle to seriously addressing this question. The recent declassification of CIA documents now makes it possible to systematically address this question in the Cold War context. We develop a new panel dataset of US interventions between 1947 and 1989. We find that the economic consequences of US interventions are limited to political environments with limited checks and balance, namely autocratic regimes. Interventions increase the flow of US goods into autocracies, raising the share of total imports into the country from US firms. However, US interventions yield few economic benefits to intervened countries; they have no impact on income levels, and on exports from and foreign direct investment into the intervened country. We conclude that the main economic beneficiaries of US interventions are US exporters and identify the industries that were the largest beneficiaries.