The new SAP in Iraq
Posted August 27, 2007on:
A commenter on the ‘Democracy and Growth’ post below said that he didn’t think “…growth was ever a putative justification for the invasion of Iraq”. While that may be the case, it didn’t stop the US from using post-war Iraq as a playground for a few ideologically driven economists. Using a regime that reminds one of the IMF’s widely criticised Structural Adjustment Programs (just Google it if you think I’m being selective in my link choice here), the US has drastically reformed Iraq’s economic policy.
Dismantling the public service, privatising much of the public sector and removing any bias towards Iraqi companies in the granting of contracts has resulted in massive unemployment and poverty in the formerly wealthy nation. Dani Rodrik links a couple of other interesting article in this post.
Admittedly, there is debate over how well the Iraqi economy is doing these days. However, whatever the goals of the invasion, they could have done better in the aftermath than pursue policies that even the IMF is now moving on from. Development economics has come a long way since the inception of SAPs and the reconstruction of Iraq was a great opportunity to show what can be done.