The newest political scientist in the blogosphere, Daniel Geffen, brings up an important reason why Iraq is unlikely to become a democratic exemplar for the Middle East. Oil. Heavy oil exporters have a miserable democratic record, with the sole exception of Norway. There’s little reason to expect that Iraq will be any different.
Geffen refers to a recent New Republic article, which seems to be all about the difficulty of introducing democratic reforms in existing authoritarian regimes – as he says, this is a poor analogy for the current situation in Iraq. Still, there’s not much room for optimism. Terry Karl, whose book, The Paradox of Plenty is one of the classic treatments of the problem, talks about how oil-producing states are bedevilled by
an exceptionally close linkage between economic and political power, developing networks of complicity based on the classic exchange between the right to rule and the right to make money.
These problems are likely to be even worse when petroleum exploitation coincides with state-building. The state has a strong incentive to use petrodollars to buy off potentially troublesome social actors, creating unhealthy mutual dependencies and Olsonian economic and political stagnation. Institutions tend to be weak and poorly enforced: the state doesn’t need to make itself accountable to its citizens, because it doesn’t rely on them for its revenues.
From this perspective, the outlook for Iraqi democracy is very poor indeed. The provisional authority has taken some useful steps – the creation of an “Oil Trust Fund” will help counter the political problems of too much oil-money sloshing around in the economy. However, the administration doesn’t seem to have much interest in creating the kinds of effective, transparent institutions that might sustain democracy in the longer term. As Gayle Smith at the Center for American Progress says,
Very few countries have been able to manage excessive resource wealth successfully, and most have instead fallen victim to governance without transparency, rampant corruption, and significant income disparities. The United States has an opportunity to avoid this same problem in Iraq. But the administration is doing just the opposite – relying on oil revenues to fund both reconstruction costs and the operations of the Iraqi government instead of reforming the sector. Meanwhile, the U.S. approach to the Iraqi oil sector is clouded by the same lack of transparency that characterizes its reconstruction plan and budget, contracting operations, and overhaul of the Iraqi legal system.
Ahmed Chalabi, a kleptocrat-in-waiting if ever there was one, is already busy creating the kinds of corrupt linkages between business and politicians that have been the bane of oil producing states in other parts of the world. It doesn’t bode well for the future. Nor does the provisional authority’s decision to introduce a flat tax at the behest of the ideologues at home. This is likely further to increase the Iraqi state’s dependence on oil revenues rather than taxes (which tend, as noted, to go along with a greater level of state accountability). On current form, it’s hard to imagine Iraq becoming a successful and attractive democracy, even if you forget about the continuing violence. Domino theorists shouldn’t hold their breaths.