Taking institutions seriously: Applying the new institutional economics to Iraq

Why has a developing country like Iraq shown a fragile economic development, despite the rosy picture that had been drawn about the potential of the Iraqi economy? To answer this question, an attempt has been made to look at the Iraqi development from the new institutional economic (NIE) perspective. This article contains a brief summary of a Ph.D. dissertation on the economic development of contemporary Iraq. In essence it traces the role of institutions, institutional policies and how the rapid and frequent institutional changes have driven the Iraqi economy for decades. Although applying the NIE to Iraq expands the range of choices of institutions that could be examined, the choices have been narrowed down by focusing on three central issues: agriculture, oil and wars. The picture emerging from the dissertation is one of abrupt and instantaneous institutional changes, through which institutions were repeatedly subject to reshuffle and facing changing circumstances. Consequently these changes have markedly affected the path of economic development in Iraq.