Toward an Understanding of Economic Development in Post-2003 Iraq

Abstract

Citizen inclusion in politics and voluntary organizations, a vibrant press and media, regular elections, or greater “political inclusion” more generally are often presented—both by international organizations as well as some researchers—as elements likely, even necessary, to promote “economic inclusion” and a more equitable distribution of material benefits. We avoid structural approaches that emphasize oil and instead utilize institutional analysis to understand Iraq’s post-2003 economic and social trajectory. Specifically, we analyze how Iraq’s post-2003 political settlement along with its already deteriorating economic institutions and unfavorable economic and social conditions have combined to shape poor economic outcomes. We show, using the World Bank’s World Governance Indicators as well as other data that the more inclusive political institutions that were established in Iraq post-2003 have worked to impede economic development and inclusion. That is, increased political openness and inclusion has not resulted in greater economic inclusion; instead, Iraq’s political institutions have worked to constrain economic inclusion and a more egalitarian distribution of oil income. This revisits a classic debate in development economics and casts doubt on the reliability of the often-promoted relationship between political pluralism and economic development.