Exploring the Effects of Weak Institutions on Economic Insecurity in Kosovo

Many post-conflict states, despite large-scale development aid, continue to experience chronic underdevelopment. This research will use institutional economics and the example of Kosovo to examine the relationship between institutional structures and economic insecurity, as an indicator of development outcomes. This paper argues that while Kosovo’s parallel institutional structure is quite unique, the structure and uncertain nature of Kosovo’s post-conflict institutions make them weak which is a source of economic insecurity which undermines development efforts. This paper also refutes some of the primacy given to formal institutions as a source of development and concludes that the makeup of formal and informal institutions in Kosovo proves to have a somewhat complex relationship to economic insecurity and further to overall development outcomes. The paper concludes that a focus on developing the quality of institutions in Kosovo may be an effective development policy as it could help to decrease economic insecurity.