Thought this might be an interesting topic for you all.

THE CAUSES OF VIOLENCE IN IRAQ

Iraq has struggled with internal violence for most of its history post-independence. 4 coups occurred between independence and Saddam Hussein’s dictatorship, about 1 per decade. This unstable period ended not with a power-sharing agreement but with the personalization of the regime under Saddam, who eliminate the collective action capacity of elites rather than share. Since the demise of Saddam Hussein, conflict returned with a series of civil wars mostly along ethnic lines.

This post reviews the primary reasons for Iraq’s continued civil conflict. I start by applying evidence from cross-national regressions, which suggest that armed groups are unusually easy to start and maintain in Iraq. Next I explain how the 2005 elections failed to resolve Iraq's powersharing problems.

1.1 INCENTIVES TO START ARMED GROUPS IN IRAQ

Starting a rebellion is hard, and continuing it is even harder. Rebel movements and militia present considerable organizational challenges Collier and Hoefler. Unlike the spontaneous protest movement, they require hierarchical organization and revenue to pay workers (especially when some workers may die in combat). Workers and investors must forego other activity to fund and participate. The rebel force must avoid total annihilation by the government, as the Chinese Communist Party did in the Long March. These severe practical constraints shape where rebellions and military disunity begin or do not. Imagine trying to convince your own friends/colleagues to join a rebellion!

Oil is the single most important factor for Iraq. In 2021 Iraq’s oil exports generated $ 75 billion, which paid 90% of the state budget. That is about $2000 per person and a stunning 45% of Iraq’s GDP. This is important because taxation is quite difficult in most fragile states; producers often live in dense informal urban communities, company registration is low, and tax compliance is spotty. Why would people pay taxes to a state that fails its most basic obligation of controlling violence? Primary commodity exports sidestep this problem because even a weak state can simply control ports or border crossings (this is why border crossings were hotly contested in Afghanistan). No wonder that regression analysis consistently find that primary commodity exports are the single most important influence on conflict risk.

Because Iraq has abundant oil, the prize of taking control over the state is much larger. A state-controlling faction (a government) earns rents many times their market wage because the revenue are large and they need not provide services. These huge gains tempt entrepreneurs to start armed groups and the revenue from oil sustains them during conflict. Even ISIS was able to earn millions smuggling oil out despite their pariah status.

Armed groups in Iraq also have excellent options for external funding. Iraq’s location between Syria, Iran and Saudi Arabia make it strategically valuable as a buffer state and a transit point for weapons. The US and Iran have both supported armed groups (Iraqi Kurdistan and Shia Militias respectively). Iraq also benefits from a large diaspora community in wealthy countries such as the US and Saudi Arabia who may privately fund armed groups.

For radical religious armed groups, Islam may lower the cost of recruitment. ISIS extensively used extremist Salafist rhetoric to recruit troops, motivate them, and appeal for foreign funding. This tactic was uncommon prior to 2001 at the earliest. Geography is a rare pro-peace factor in Iraq. Most of Iraq is a flat desert and cultivated river plain, which limits armed groups ability to hide. The only exceptions are the marshes (drained by Saddam for this reason) and the northern mountains.

Finally, remember how oil exports are 45% of Iraq's GDP? That means all the wagies in Iraq together are producing only slightly more than half of Iraq's value, and imports must be huge (imports are not included in GDP). The comparable number in Saudi is just 28%. That means Iraq's domestic economy sucks if you are not getting oil money. With non-oil productivity so low, the opportunity cost of fighting is low. Also most fighters are seasonal, fighting only when demand for farm labor is low.

1.2 POLITICAL INSTITUTIONS

An astute observer might point out that Saudi Arabia and Iran share most of the above factors, but have not experienced similar levels of violence. This unexplained variance might be truly random, or due to idiosyncratic factors impossible to compare. But a compelling explanation is variation in macro political institutions.

Fighting is always pareto suboptimal. Eventually some faction will get the rent, or they will split it by some fraction. But fighting wastes valuable resources fighting and delaying consumption[^1]. If the respective parties agreed to split the rents at the expected value of fighting, both parties would profit (except when the agreement gives the entire surplus to one party, which is also an equilibrium). This splitting of rents and policy control is called "power sharing". The rarity of civil conflict and presence of vast rents at each border crossing or port suggest that most political systems do succeed in sharing.

For power sharing to work though, it has to be enforceable. That means once an agreement is made, the parties actually want to stick to it. Since states are sovereign and there is no world policeman, the parties have to enforce the agreements themselves. Strikes, divestment, investment, blackmail, protests and of course guns are all enforcement tools.

Iraq has experimented with a diverse set of political institutions since 1932. It began with a monarchy, followed by several revolutionary military regimes, followed by party rule, followed quickly by a personalist dictatorship which hollowed out the party. Each of these institutions failed at power sharing, but I will give a detailed discussion of just one: the election of 2005.

Democracies broadly rely on two mechanisms for power sharing: majority cycling and minority-empowering constraints (aka checks and balances). Majority cycling occurs when subsequent elections regularly return a different coalition to government; the government restrains their predation because their current victims may soon be their overlords. Checks and balances are formal mechanisms for empower minorities, like bicameralism or a supreme court.

However, majority cycling requires voters to change parties enough to sway elections. If voters prefer to vote exclusively within one ethnic group and their parties only form coalitions in the ethnicity, majority cycling will never include minority groups. This permanent exclusion allows predation with impunity.

Because Iraq was 65% Shia in 2005, the Shia could assure themselves of a permanent majority. Even worse, the winner of the election got to write the constitution, and therefore set the level of checks and balances. Naturally the Shia were expected to set few checks. The Sunnis expected this exclusion and escalated violence in response. After all, violence was the only route to political power when democracy had no power sharing.

If people are interested I can do another post bringing this up to the present.

[^1] Technically this is true of elections, but electoral competition is an order of magnitude cheaper than fighting, even if you only count what the armies spend in cash. The Tamil Tigers spend about $300 million in a year to control a small portion of Sri Lanka, more than all parties combined spend on French elections.