The Political Economy of Economic Policy in Iraq

Since 2003, despite an abundance of resources and a more pluralistic political settlement, Iraq’s economic reform process has failed to take off.

Alexander Hamilton's new paper explores the link between the evolution and consolidation of Iraq’s post-2003 political settlement and how this has impacted the incentives decision-makers face when implementing economic policy. Paradoxically, the fact that the settlement has accommodated more groups than its repressive predecessor has not resulted in more inclusive or long-term oriented economic decision-making. This is because the inclusion of more (elite) groups reflects the fact that more actors can now generate violence if they are not placated with state-generated rents. Transitioning away from policy-makers’ consequent short-termism will require patient economic reforms, slowly creating new pressures on political actors to support the delivery of public goods and a policy environment more conducive to private sector growth.

Alexander Hamilton is an economic adviser for the UK Department for International Development (DFID) based in Baghdad and leading on DFID’s economic reform programme in Iraq. He completed his PhD in Political Economy at the University of Oxford and has previously worked for the World Bank. His area of expertise is the economics of fragile states. Specifically, he focuses on the application of political economy tools to better understand and support economic reforms in resource rich fragile state contexts.

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