by Christopher
L. Foote, William Block, Keith Crane, and Simon Gray
No. 1, January 2004 - August 2004
Motivation for the Research
Economic reform was central to the Coalition Provisional Authority’s
attempts to rebuild Iraq. This paper describes the Coalition’s
attempts to stabilize and reform Iraq’s economy along
market lines.
Research Approach
The authors piece together, adjust, and analyze data from
official and other sources to develop an overview of the performance
of the Iraqi economy at the macro level over the past 35 years,
as backdrop to the current situation. They then evaluate the
impact of the steps undertaken by the Coalition to stabilize
and restart the economy, and they assess the economy’s
future prospects.
Key Findings
- Iraq’s economic meltdown has been the result of
three wars: the nation’s eight-year war with Iran,
the Persian Gulf War, and the war to replace the Saddam
Hussein regime.
- With respect to the current situation, while security
concerns remain serious, Iraq’s economy has not been
crippled by violence.
- Since the end of the conflict, small businesses have
been able to grow and thrive despite domestic unrest, and
a plurality of Iraqis believe that the employment situation
in Iraq is better now than before the war.
- Unemployment remains high, and a large majority of Iraqis
believe that improved job opportunities would reduce violence.
Implications
Sustained economic growth will depend on whether
Iraq’s future leaders pursue the pro-market approaches
the Coalition has advocated. If the Iraqi economy is to reach
its potential, Iraq’s future government will need to
go even further than the Coalition did, implementing reforms
the Coalition did not pursue because of security concerns.
Full text of Public
Policy Discussion Paper 04-1 
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