This is a joint post with Steph Majerowicz.
The Arab Spring has grabbed the world’s attention, yet Iraq—the Arab country that not long ago was the very epicenter of American foreign policy—has all but fallen off the front pages. While Iraq’s security has improved greatly, the country is still struggling to consolidate a functional government in the face of strong sectarian tensions. Not least of these big challenges is reaching agreement on oil. Eight years after the fall of Saddam, Iraq has yet to pass a hydrocarbons law, let alone come up with a coherent spending plan for its oil wealth.
Related Working Paper and Podcast
Iraq’s Last Window: Diffusing the Risks of a Petro-State - Working Paper 266
Oil 2 Cash in Iraq: Johnny West (Podcast)
So how could Iraq manage its oil? One idea (and readers of this blog will be shocked to hear) is a universal dividend paid to all Iraqis. Colleagues Nancy Birdsall and Arvind Subramanian proposed just this idea back in 2004 as a way to try to create accountability. The idea of an Alaska-style dividend for Iraq was starting to catch on, for example, this NY Times oped by Steven Clemons, proposals from Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA), and even former Alaskan governor and dividend godfather Jay Hammond tried to export his grand experiment to Baghdad. Given the political and security climate of the time, the idea was thought too radical.