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 4: Corruption

Frank R. Gunter

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

Extract

Like sand after a desert storm, corruption permeates every corner of Iraqi society. According to the report by Transparency International (2011), Iraq is not the most corrupt country on earth – that dubious honor belongs to a tie between Somalia and North Korea – but Iraq is in ninth-to- last place ranking 175th out of the 183 countries evaluated. Corruption in Iraq extends from the ministries in Baghdad to police stations and food distribution centers in every small town. (For an excellent overview of the range and challenges of corruption in Iraq, see Looney 2008.) While academics may argue that small amounts of corruption act as a “lubricant” for government activities, the large scale of corruption in Iraq undermines private and public attempts to achieve a better life for the average Iraqi. The former Iraqi Minister of Finance and the Governor of the Central Bank stated that the deleterious impact of corruption was worse than that of the insurgency (Minister of Finance 2005). This is consistent with the Knack and Keefer study (1995, Table 3) that showed that corruption has a greater adverse impact on economic growth than political violence. Corruption is the abuse of public power for private benefit. Corruption occurs if a government official has the power to grant or withhold something of value and – contrary to laws and publicized procedures – trades this something of value for a gift or reward. Corruption is a form of rent-seeking.

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