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Resources and the Political Economy of State Fragility in Conflict States: Iraq and Somalia

  • Dibeh, Ghassan

This paper studies state failure and governance in two conflict-states in the Middle East: Iraq and Somalia. Iraq is currently undergoing a social experiment under which a new form of government is being constructed after the passage of autocratic rule. The government envisaged is a consociational democratic state designed a priori as a political mechanism for the redistribution of resources, mainly oil. Somalia represents a stateless society or anarchy. The paper argues that in resource-rich countries such as Iraq, the consociational project leads to an Olson-type rent-seeking confessional behaviour that hampers economic growth and development. The rent-seeking behaviour in Iraq is fuelling the insurgency that perceives the consociational system as a grabbing attempt of the country?s resources by other ethnic groups. However, state construction is possible since there is a positive economic effect of combining government and resources. In Somalia, on the other hand, the developments and the evolution of anarchy since state collapse in 1991 exemplify the result of prolonged conflict in a resource-poor state. The lack of resources, direct access of producers to resources and low productivity and weak redistributional potential of combining resources and government offer no material incentives to the various groups for resurrecting central authority.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2008/rp2008-35.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/35.

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Length: 18 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-35
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  1. Findlay, Ronald, 1989. "Is the new political economy relevant to developing countries ?," Policy Research Working Paper Series 292, The World Bank.
  2. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
  3. Ola Olsson, 2004. "Conflict Diamonds," DEGIT Conference Papers c009_013, DEGIT, Dynamics, Economic Growth, and International Trade.
  4. Leeson, Peter T., 2007. "Better off stateless: Somalia before and after government collapse," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 689-710, December.
  5. Mubarak, Jamil A., 1997. "The "hidden hand" behind the resilience of the stateless economy of Somalia," World Development, Elsevier, vol. 25(12), pages 2027-2041, December.
  6. Christopher Foote & William Block & Keith Crane & Simon Gray, 2004. "Economic Policy and Prospects in Iraq," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 47-70, Summer.
  7. Dibeh, Ghassan, 2005. "The Political Economy of Postwar Reconstruction in Lebanon," Working Paper Series RP2005/44, World Institute for Development Economic Research (UNU-WIDER).
  8. Karras, Georgios, 1996. "The Optimal Government Size: Further International Evidence on the Productivity of Government Services," Economic Inquiry, Western Economic Association International, vol. 34(2), pages 193-203, April.
  9. Silje Aslaksen & Ragnar Torvik, 2005. "A theory of civil conflict and democracy in rentier states," Working Paper Series 5805, Department of Economics, Norwegian University of Science and Technology.
  10. Ken Menkhaus, 2003. "State collapse in Somalia: second thoughts," Review of African Political Economy, Taylor & Francis Journals, vol. 30(97), pages 405-422, September.
  11. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
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