21 Jun 2021

Corruption Worse Than ISIS: Causes and Cures for Iraqi Corruption

“Corruption benefits the few at the expense of the many; it delays and distorts economic development, pre-empts basic rights and due process, and diverts resources from basic services, international aid, and whole economies. Particularly where state institutions are weak, it is often linked to violence.” (Johnston 2006 as quoted by Allawi 2020)

Like sand after a desert storm, corruption permeates every corner of Iraqi society. According to Transparency International (2021), Iraq is not the most corrupt country on earth – that dubious  honor is a tie between Somalia and South Sudan – but Iraq is in the bottom 12% ranking 160th out of the 180 countries evaluated. With respect to corruption, Iraq is tied with Cambodia, Chad, Comoros, and Eritrea.

Corruption in Iraq extends from the ministries in Baghdad to police stations and food distribution centers in every small town. (For excellent overviews of the range and challenges of corruption in Iraq, see Allawi 2020 and Looney 2008.) While academics may argue that small amounts of corruption act as a “lubricant” for government activities, the large scale of corruption in Iraq undermines private and public attempts to achieve a better life for the average Iraqi.

Frank R. Gunter
Frank R. Gunter

Professor of Economics, Lehigh University

The former Iraqi Minister of Finance and the Governor of the Central Bank stated that the deleterious impact of corruption was worse than that of the insurgency (Minister of Finance 2005). This is consistent with the Knack and Keefer study (1995, Table 3) that showed that corruption has a greater adverse impact on economic growth than political violence.

Corruption is the abuse of public power for private benefit. Corruption occurs if a government official has the power to grant or withhold some-thing of value and – contrary to laws or publicized procedures – trades this something of value for a gift or reward. Corruption is a form of rent-seeking. Among corrupt acts, bribery gets the most attention, but corruption can also include nepotism, official theft, fraud, certain patron- client relationships, or extortion (Bardhan 1997, pp. 1320–1322; Gunter 2008). Private corruption, such as insider trading, is not considered in this chapter.

One of the challenges of studying corruption in Iraq is that the word “corruption” is both descriptive and pejorative. Societies that have long cultural traditions of patron-client relationships or giving “gifts” to officials tend to object strongly to describing such behavior as corruption. It is often argued that calling such cultural traditions corruption is a distortion, an attempt to apply Western standards to non-Western societies. It would be useful if there were a separate word to describe corrupt behavior in a neutral fashion and another to refer to such behavior critically such as the distinction between “killing” and “murder”.

However, in this essay, corruption is intended to describe a particular form of behavior not to make a pejorative statement. An adverse connotation may be deserved since corruption tends to adversely affect economic development regardless of culture. The correlation between corruption and per capita income adjusted for cost of living is strongly negative. Regardless of culture or geographic location, there are no (very) corrupt rich countries and few honest poor countries.

To maintain a reasonable size, this essay focuses on corruption of Iraqi officials and institutions. Therefore, it excludes the rapidly increasing number of studies on the corruption of international institutions such as the United Nations during the sanctions period as well as evidence of corrupt acts on the part of representatives of other nations, such as the USA, that have played major roles in Iraq’s recent history.

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