The Political Economy of Iraq

The Political Economy of Iraq

Restoring Balance in a Post-Conflict Society

Frank R. Gunter

This groundbreaking volume offers a comprehensive look at the current state of Iraq’s political economy in the aftermath of the US-led overthrow of Saddam Hussein in 2003. Frank R. Gunter describes the unique difficulties facing the modern Iraqi economy and provides detailed recommendations for fostering future economic growth and stability.

Chapter 1: Iraq’s lost decades

Frank R. Gunter

Subjects: economics and finance, development economics, political economy, politics and public policy, political economy


In Iraq, history is repeating itself. In 1955, Lord Salter argued that an objective analysis of Iraq’s political economy showed that the country would have a bright future of peace and prosperity. His vision was wrong or very premature as conflict, corruption, and mismanagement devastated the country. A military coup in 1958 overthrew King Faisal II and imposed a socialist republic. A leader of the Arab Ba’athist Socialist Party, Saddam Hussein, became president in 1979, purged his enemies and launched on a 24-year absolutist reign that combined severe oppression at home, brutal wars with two of Iraq’s regional neighbors, and the building of an extremely corrupt and bureaucratic economy. After Saddam’s overthrow by a US-led coalition in 2003, Iraq was politically, economically, and physically in ruins and teetering on the edge of a civil war. Now in 2012, there is once again a resurgence of optimism. Violence has dropped sharply since 2006. Oil prices are higher than expected while oil export volumes are increasing. And, as a result of what Fouad Ajami (2006) referred to as the “foreigner’s gift”, Iraq has a nascent democracy. Iraq once again has the potential to achieve a bright future for its people. Whether that potential will be realized depends on the ability of the Iraqi people and their leadership.

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