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Colleagues and friends of CGD:
This week I started leave from CGD for three-plus months, to teach at Williams College. For those of you from the US west coast and outside the United States, Williams is among America’s most selective (and expensive!) small liberal arts colleges. It’s nestled in a tiny town in the Berkshire mountains in western Massachusetts.
The Obama Administration, whether by design or by accident, has opened the door for the first time in the World Bank’s history to the possibility of a real contest over the merits of its nominee to take the helm there compared to a nominee from the developing world. All three candidates have experience working on development (and that is a refreshing change from the tradition of financiers and political heavyweights at the helm). But their strengths are different. In the case of Kim, the U.S.
Libya’s oil puts at risk its hopes of becoming a democracy. If easy oil money is captured by a few people, and they then control politics, Libya will end up looking more like Angola and less like Norway.
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.
It is thrilling to watch the overthrow of despots and dynasties as people power erupts across the Arab world. But the headiness of the moment can only lead to durable political change and meaningful economic progress if the new governments that emerge find a better way to handle oil revenue and other easy money (rents, in econo-speak) that have corrupted the outgoing regimes.
The Economist has a nice piece here on the True Size of Africa. It’s about geographic size (Africa is bigger than you think – which is true for all countries and regions near the equator that don’t benefit from the Mercator distortion in our two-dimensional map world).