The Iraq Effect: Size and Fragmentation

Background

During Spring 2004, I took English 103, Critical/Argumentative Writing, with Associate Professor Barbara Mueller at Cerritos College. I decided to undertake a Scholars’ Honors Program Research project for the course. I chose to read The Size of Nations (MIT Press, 2004) by Alberto Alesina and Enrico Spolaore. After completing an exhaustive reading and note-taking of the book, I produced a 20+ page research paper titled “The Size of Iraq.”

In Spring 2005, I was offered an opportunity to present my paper. I renamed the work “The Iraq Effect: Size and Fragmentation” to account for my latest observations of Iraq because a tremendous amount changed over the course of a year. Soon thereafter, I presented my work at the 5th Annual Honors Transfer Council of California Undergraduate Research Conference for Community College Students in Irvine, CA, March 5, 2005 and at the Western Regional Honors Conference in Las Vegas, Nevada, April 7 – 10, 2005. It was an excellent experience and I encourage others to take advantage of such opportunities.

Abstract

The Iraq Effect is that of Iraq as a representation of nation fragmentation in the post-Cold War era. Utilizing the political-economic tools in Alberto Alesina and Enrico Spolaore’s The Size of Nations, I focus on the political-economic impacts of an authoritarian government, the increasing openness and economic integration of nation-states, and the need for federalism and decentralization within nation-states.

The United States led invasion of Iraq in March 2003 leads us to Iraq’s current state of affairs. The short term impact of removing Saddam Hussein, an authoritarian ruler, is stage-setting and three-fold: chaos, as seen through constant insurgent attacks, democratization of Iraq with its recent elections and current attempts to create a coalition government and the reconstruction of infrastructure which has deteriorated over the past two and a half decades.

As the stage for Iraq is continuing to be set, Alesina and Spolaore note that “issues of conflict, defense, and security have historically been important factors in the determination and redrawing of political borders” (95). Iraq and its people will undertake the daunting process of democratization amongst a divided populous.

On a global level, the Iraq Effect is profound because Iraq will now act as an empirical model of democratization and how democratization can lead to fragmentation of large nation-states, into smaller, more homogenous, nation-states. With The Size of Nations and its political-economic tools, I have come to the conclusion that the benefits do not outweigh the costs of holding the three ethno-religious regions of the Kurds, Sunnis and Shiites together in the form of a unified Iraq.

Conclusions

Questions regarding The Size of Nations

What determines the size of nations and how does their size change over time? Differences such as race, religion, language, politics, economics and geography can determine size and cause changes over time.

Does a country’s size matter for economic success? It depends.

What are the benefits of size versus costs of heterogeneity of preferences? Benefits: greater production power, decreased per capita costs, a larger market and increased bargaining power. Costs: forced assimilation, oppression and a conflictual atmosphere.

Questions regarding The Size of Iraq

Past: How was the size of Iraq determined and maintained from the fall of the Ottoman Empire after World War I to the Saddam Hussein era? Following World War I, Iraq was carved out of the defunct Ottoman Empire and Britain gained control at the San Remo Conference of 1920. Hussein, along with existing border constraints, maintained Iraq’s size.

Present: What are the short and long term impacts of removing Saddam Hussein? Short term: chaos, democratization and reconstruction of infrastructure. Long term: decentralization, increased economic activity, and potential internal conflict.

Future: Will Iraq be able to maintain its current size or will it fragment into separate nations? Fragment since the benefits of size do not outweigh the costs of holding the three ethno-religious regions together.

Essay

Josh Franco

Professor Mueller

English 103

17 May 2004

The Size of Iraq - Scholars’ Honors Project

In the opening chapter of The Size of Nations, authors Alberto Alesina and Enrico Spolaore present the issue:

“In fact, while international economics is, by definition, about economic exchanges across national borders, borders themselves are treated as part of the geographical landscape, like coasts or mountains. However, national borders are not a natural phenomenon; they are human-made institutions and they can be studied with the same tools of political-economic analysis that have been profitably applied to other areas of human activity.” (Alesina and Spolaore 2)

I will decipher the size of nations and the size of Iraq using the political-economic tools described in The Size of Nations.

When presented with a world of nations to choose from, a select few stand out. Nations like the United States, economic communities like the European Union, and a region like the Middle East are all prominent. However, I feel the Middle East and in detail, Iraq is the most notable because of its current situation and the following, enticing factors: the removal of Saddam Hussein; the development of a democratic nation in the heart of an autocratic region; and the internal strife between the three major ethno-religious populations: Kurds, Sunnis, and Shiites.

In explaining the size of nations, the text poses three major questions: What determines the size of nations and how does their size change over time? Does a country’s size matter for economic success? What are the benefits of size versus costs of heterogeneity of preferences?

In explaining the size of Iraq, I have three important questions: How was the size of Iraq determined and maintained from the fall of the Ottoman Empire after World War I to the Saddam Hussein era? What are the short and long term impacts of removing Saddam Hussein? Will Iraq be able to maintain its current size or will it fragment into separate nations?

In The Size of Nations, the authors look to nine areas of analysis to answer the aforementioned questions: Overlapping Jurisdictions and the State, Voting on Borders, Transfers, Leviathans and the Size of Nations, Openness, Economic Integration, and the Size of Nations, Conflict and the Size of Nations, War, Peace, and the Size of Nations, Federalism and Decentralization, and Size and Economic Performance. Each area of analysis is a tool that can be used to explain the size of nations and the size of Iraq.

To begin, in Overlapping Jurisdictions and the State, the authors argue jurisdictions are created because economies of scope exist and can cause “overlapping” to occur. Jurisdictions are defined as areas or regions which a government: national, sub-national, or local has the power to implement public policies that generate public goods. The authors state: “while national governments assume the responsibility for several policy prerogatives, they do not have a monopoly on public policy. Sub-national levels of government are important providers of public goods” (Alesina and Spolaore 17) and include city, county, and state. Public goods include financial and judicial institutions, education, police, fire, and health services, and law and order.

Economies of scope occur when the average total cost of production decreases as a result of increasing the number of different goods produced. So, instead of a government producing a single good, it should produce a multiple number of goods, if the average total cost decreases. The authors contend that high economies of scope lead to non-overlapping jurisdictions because a national government would be best equipped, in cost-benefit terms, to generate all the goods the public needs. If economies of scope was low, then it would be best to spread the production of public goods to sub-national governments.

Overlapping jurisdictions can create a “maze” and lead to excessive transaction and communication costs. If the cost outweighs the benefit, then the public is placed at a disadvantage and this should not occur if the government wishes to maintain power.

The level of government which generates the public good is pivotal and it has been proved that small jurisdictions should provide public goods with low economies of scale and large heterogeneity costs and vice versa. Economies of scale equal the marginal or extra cost of a product decreases as more of the product is produced. Heterogeneity costs include differences in public policy preferences. Example: people living in a desert town wouldn’t mind water rationing. The exact opposite would be true for people living next to a river, a place with an abundant amount of water.

Small jurisdictions, such as local and sub-national government, should provide education standards, business regulations, and tax policies. Large jurisdictions, such as the national government, should provide communication standards, financial regulations, foreign policies and defense. The reason is to avoid overlapping jurisdictions and provide the highest benefit at the lowest cost.

“The local governance issue is hard to assess, one way or another — primarily because prior to the war, no such structures existed” (“Power,” 14 Mar 2004 ABC News).

Iraq has 18 provinces or sub-national jurisdictions, but since Saddam Hussein would hand-pick a person to govern each province, jurisdictional control was maintained on the national level. Did the overlapping of jurisdictions occur in Iraq? Not sure, because I am unable to determine the degree to which Iraq incurred excessive transaction and communication costs due to a lack of data available. However, Hussein did grant some regions a minimal amount of freedom. For example, the Kurds in northern Iraq declared itself an autonomous region or separate national jurisdiction free from Hussein. “Northern Iraq had been outside Baghdad’s [Hussein's] control since the end of the Persian Gulf War in 1991. U.S. and British jets enforced a “no-fly” zone over the area, to keep Iraqi forces out” (“Iraqi Kurds,” 12 Apr 2003 CNN).

With the removal of Hussein and the potential establishment of democratic ideals, the 18 Iraqi provinces will have a greater role in determining policies specific to their populations. But population densities and differences will decide whether or not the current province lines will be kept or if in the future, new lines will be drawn.

In Voting on Borders, the authors in The Size of Nations contend that because of democratic institutions, the optimal configuration of borders cannot be obtained. Optimal configuration is one that “maximizes total welfare but the distribution of welfare is uneven” (Alesina and Spolaore 31). Even though the total welfare is maximized, the people far from the center, in terms of policy preference and geographical location, will seek either unilateral secession or a voting referendum to rearrange borders in order to even the “uneven” distribution of welfare.

Democratic equilibrium: “one person-one vote majority does not always produce outcomes that maximizes everyone’s welfare” (Alesina and Spolaore 35). Such tendencies could reduce the average welfare provided because the pool of available resources would diminished with the break-up of a nation, meaning the benefits of economies of scale are less applicable because large nations are able to provide public goods at a lower cost per person.

Is voting on borders possible in Iraq? No, because in the case of Iraq, democratic institutions do not exist. Furthermore, Iraq’s geographical size had little impact on the total welfare provided because of Saddam Hussein would control who was given what. However, with the removal of Hussein, the outlook for democratic institutions in Iraq is brighter.

I believe Iraq will fragment into either stand-alone nations or into sub-national jurisdictions or states based on ethno-religious borders with the full introduction of voting. “Constructing a representative government from the ashes of Saddam Hussein’s totalitarian regime is a daunting challenge for Iraq. “If you look at an ethnic map, you’d say that Iraq’s political geography is at odds with its cultural geography,” says geographer Harm De Blij, distinguished professor at Michigan State University” (Handwerk, 24 Apr 2003 National Geographic). The “ethnic map” is crucial in the voting on borders concept.

In Transfers, the authors note transfers of goods or services can occur on several levels, however this section covers transfers between regions in a single nation. Voting on borders is less likely to break-up a nation because interregional transfers allow for a national government to appease secessionist regions in order to maintain the benefits of size. This means the optimal configuration of borders could be “sustainable through compensation schemes in which people far from the government pay lower taxes, or even receive net positive transfer” (Alesina and Spolaore 53).

Two important factors must be considered to determine if interregional transfers can maintain border equilibrium: feasibility and credibility. Feasible in terms of benefit outweighing the cost and credible in terms of the government’s legitimacy with the public. If the cost is too much or there is a lack of legitimacy, then transfers cannot be used.

In order to maintain control, Saddam Hussein could have either used transfers to appease specific ethno-religious groups such as the Kurds, Sunnis, and Shiites or he could oppress them with armed forces. He chose the latter.

Where transfers feasible in Iraq during Hussein’s reign? Yes, because banks had been established, a uniform currency was in place to purchase goods and services, and roads and railroad were available to transport items throughout Iraq. Was Saddam a credible person? In the view of most Iraqis, no because he chose the route of brutal oppression. Further, “the UN Commission on Human Rights condemned the Iraqi [Hussein] regime in 2001 for “widespread, systematic torture and the maintaining of decrees prescribing cruel and inhuman punishment as a penalty for offenses” (“Likely charges,” 16 Dec 2003 BBC News).

With choosing oppression, Hussein avoided the factors of feasibility and credibility in utilizing interregional transfers. But if Saddam tried to use transfer, would he have been successful? No, because even though it was feasible, Hussein was not credible.

Will interregional transfers occur with the removal of Hussein and establishment of democratic institutions? It depends. The entho-religious composition of Iraq will lead to polarization among the Kurds, Sunnis, and Shiites. Therefore, it becomes more complicated and arduous for a democratic government to provide compensation to specific regions because of competing interests. If transfers cannot be provided, then the chances of secession is higher because certain regions will not get their fair share and want to leave.

“”The neighboring countries [of Iraq] contemplate either an Iraq that is a democratic success or chaotic and breaking up, and they want something in between,” says Faleh Jabar, an Iraqi sociologist at the United States Institute for Peace (USIP)” (LaFranchi, 10 May 2004 Christian Science Monitor). The statement is true because Iraq’s neighbors will be the first to feel the impacts of a democratic or chaotic Iraq. If Iraq is perfectly democratic, then such inclinations of freedom could spread to the populations of other nations and bring about open revolts for change. In the other case, if Iraq is chaotic, then refugees could flood into neighboring nations, straining their resources.

In Leviathans and the Size of Nations, the authors in The Size of Nations define a leviathan as a dictatorial, rent-maximizing government with the ultimate goal of extracting the largest possible rents from its population.

“Even a dictator who does not need the support of the majority of the population to stay in power will nonetheless need to provide some minimum level of well-being to at least a faction of his subjects in order to ensure his political survival” (Alesina and Spolaore 69).

Leviathans seek to control larger populations to extract larger rents. If constraints did not exist, then a leviathan would control the entire world, but constraints do exists, therefore limiting a leviathan. The “no insurrection constraint” forces leviathans to either make the population more homogeneous with “public education, propaganda, repression of minority languages, religions, or cultures” (Alesina and Spolaore 72) or grant a larger portion of the population a political voice. For example: inclusion into the ruling regime or voting rights, but this can lead to a leviathans downfall. The reason being is that some political voice could empower a person to demand more and more. The door can never shut, sealing a leviathan’s power because someone’s political ambitions stop the door.

“As the technology of war evolved and economies of scale and fixed cost became more relevant, more powerful lords [leviathans] consolidated their holdings, smaller lords [leviathans] lost out, and entry became much more difficult” (Alesina and Spolaore 73). Rent-maximizing governments became so large because in order to maintain power, more resources were needed to produce and maintain a superior war machine. Leviathans continuing expansion for power eventually leads to their downfall because their unable to quell the growing differences and discontent among the populations it controls.

Saddam Hussein was a leviathan. On several instances, such as the war with Iran in the 1980s or the invasion of Kuwait in 1990s, Hussein has sought to expand the size of Iraq. Moreover, Iraq’s enormous oil cache, which is estimated at 10.7% of proved oil reserves, allowed Hussein to expand his personal wealth. “Iraqi smuggling of petroleum products overland to Turkey and through Iranian waters in the Arabian Gulf, in violation of UN sanctions, also brought in US$300-$400 million a year for Saddam Hussein. Proceeds supported the Iraqi regime rather than improved the welfare of the Iraqi people” (“Iraq Country Handbook,” Department of Defense 13 Sept 2002).

Hussein’s Sunni origin led to the repression of the Kurds and Shiites, and discontented Sunnis, both overt and covert. Furthermore, Hussein did not grant individuals or groups a political voice, instead he demanded absolutely loyalty and would silence those who opposed him. Even though the Kurds in northern Iraq obtained some freedom, it was due to “no-fly zone” and international protection.

Hussein was able to force some degree of co-existence among the differing populations, but is a leviathan needed to keep Iraq together? It depends. It is important to note that discontent among the international population led to Hussein’s downfall. Even though the Kurds and Shiites were oppressed, no group gained enough power to overthrow Hussein. With the removal of Hussein, the potential creation of another leviathan is slim to none. The present borders, cultural constraints, and United States involvement will not permit the rise of another Hussein. So a leviathan, even if needed, won’t happen.

In Openness, Economic Integration, and the Size of Nations, the authors declare “whether country size matters for economic prosperity depends on a country’s degree of economic integration with the rest of the world” (Alesina and Spolaore 81).

For example, in a world of complete openness, the size of a nation does not matter because the entire world is the nation’s economic market or place where goods and services can be sold. However, in a world of closed borders, the size of nation does matter because it is also the size of its economic market. With closed borders, size is more important because a larger nation has more land, labor and natural resources at its disposal to produce and foster economic growth.

Increased economic integration leads to an increase in political disintegration because the need to be apart of a large nation diminishes or the economic costs of being small no longer outweigh the benefits. Now small, more homogeneous populations have an advantage in creating their own separate nation. “Free trade and open capital markets allow small countries to prosper” (Alesina and Spolaore 85).

While Saddam Hussein was in power, Iraq never reached its true economic potential because of embargoes and sanctions imposed for his actions. He crippled the nation. But with the major political barrier of Hussein erased, Iraq can now build its economic ties with other nations. Iraq would benefit from an open door economy, but it must be careful to control its growth. The risk of inflation or the average price of goods and services increasing, along with corporations out-running regulations could lead to depression and/or backlash.

“The modern Iraqi economy has been largely based on petroleum. Most of the few large manufacturing industries have to do with oil” (“Iraq,” Encarta 2004). Iraq’s vast oil network operates as a single unit and I feel it is the binding factor. Even with prominent entho-religious differences, on the economic level, it would not be wise for Iraq to split into separate regions because the revenues generated from oil will allow Iraq to develop its infrastructure and economy. “While Iraq has huge supplies of oil, those who have been examining Iraq’s oil producing infrastructure say it is not in great shape. The pumps are reportedly worn out, and pipes need cleaning out” (Hodson, 22 Apr 2003 CNN). Before it can operate as a whole, Iraq’s oil network needs to be repaired and upgraded to take advantage of today’s technology.

In Conflict and the Size of Nations, the authors in The Size of Nations state “issues of conflict, defense, and security have historically been important factors in the determination and redrawing of political borders” (Alesina and Spolaore 95). The authors focus on bilateral conflicts in the absence of international entities.

Populations tend to conglomerate when external threats are high. Defense is considered a public good. Bigger is better: larger nations provide the most effective defense, in cost-benefit terms, because of economies of scale.

Domestic conflicts can be settled with a uniform legal framework and a government which maintains a monopoly of legitimate coercion. Monopoly of legitimate coercion is when a government has the consent of the majority of the population to impose rules and regulations. When international authorities and laws are not consider, international disputes can be settled with potential or actual armed conflict. “Muscle flexing and threats of military intervention buy advantageous settlements in international disputes” (Alesina and Spolaore 98).

If international conflicts are less probable, then the need to have a large nation decreases, leading to an increase in the number of smaller, more homogeneous nations. However, if there are more countries, this could lead to a net increase in conflicts. Instead of wars across the world, the wars become localized and as small nations battle with other small nations, and an absolute victor is less likely due to the lack of battle capabilities.

Saddam Hussein allocated a huge amount of resources on internal, like the Kurds and Shiites, and external, like the United States, threats. Hussein spent an estimated $1.3 billion on its military in 2000, ranking it 45th, but compared to the United States which spends an estimated $276.7 billion, ranking it 1st in the world (“Iraq,” CIA World Factbook 18 Dec 2003), Iraq is no match. Economic embargoes and sanctions after the 1991 Gulf War doomed Hussein from rebuilding his forces. In the 2002 bilateral conflict with the United States, the largest and most advance military in the world, Hussein was defeated with great ease.

What is the outcome of removing Hussein from power? There is no single outcome, but rather several possible outcomes. One, Iraq will develop a mild military force in order to enforce its internal national security. Two, it will become a “hot spot” of local conflict between the different entho-religious groups. Three, Iraq could become an extension of the United States, and lead to a “cold war” sort of battle with Iraq’s neighbors of Syria or Iran. The final is that a sense of nationalism across Iraq will merge the three major entho-religious groups and give Iraq a desire to overtake its neighbors, lead a pan-Arab military organization and/or form aspirations to attack the United States.

The first outcome is the desired one, however the second, third and forth are feasible. “But it is three other influential neighbors - Iran, Saudi Arabia, and Syria - that are seen by some experts as the most meddlesome in Iraq’s affairs. The three are the most determined to augment their political influence, experts say, while being the most wary of a successful, pro-US democracy” (LaFranchi, 10 May 2004 Christian Science Monitor). I am optimistic as well as fearful with regards to the future of Iraq and the Middle East; it will take time and a huge amount international ignorance for the situation to reach the last two critical outcomes.

In War, Peace, and the Size of Nations, the authors extend upon their model of conflicts and take into account international actors such as laws and organizations. “If the enforcement of international law were perfect, defense spending would become irrelevant, and conflict would play no role in country formation. However, the enforcement of international law is in fact imperfect, so defense and conflict will affect country formation” (Alesina and Spolaore 112).

When international actors are considered, large nations no longer have an absolute advantage in peaceful bargaining and non-peaceful confrontations. Better able to compete because of international pacts, treaties or alliances, small nations no longer have an absolute disadvantage. Increased international cooperation leads to political and economic cooperation. With increased cooperation, the need to be apart of a large nation decreases, and can lead to the break-up of nations.

Furthermore, as peace leads to the break-up of nations, break-up leads to an increase in across-border interactions. Such interactions can create conflict due to competing interests. “Conflict reduces trade among countries” (Alesina Spolaore 127). Conflict forces nations to close their borders, redirect their resources and mobilize into a war machine.

Imagine a class room, with ten students and an instructor. The instructor is international actor (I0); implementing laws and promoting democratic ideals. The ten students are a single nation (N0). However, because of the international actor’s policies, the ten students are able to split into two groups of five (N1 and N2). The split creates a barrier to trade, because the two groups have different political-economic tastes and policy preferences. The human-made barrier is an antagonist, generating conflict. Fighting amongst the majorities and minorities in N1 and N2 lead to the creation of two more nations (N1A, N1B, N2A, N2B). “A” has three students and “B” has two students. The barriers to trade have just quadrupled. Now, the international actor (I0) interjects; reduces the conflicting nature of the situation and promotes peace among the pretend nations. The question is whether or not I0 has the ability to quell the antagonism? Yes, because in the simple classroom model, the instructor has total control of the situation because he or she is the one who decides the student’s grades. However, in the real world, nations are not graded, international actors do not have absolute authority, and nations consist of millions of individuals with different values and interests.

Saddam Hussein was able to bargain, reconcile and maintain control after the 1991 Gulf War because of the United Nations, an international actor, and its involvement. The United States could have eliminated Hussein a dozen times over, however because of international laws and organizations, the United States was constrained.

In 2003, Hussein was overthrown and captured in a matter of months because of unilateral action and an overwhelming international force relative to Hussein’s forces. Unilateral action meant the United Nations did not give the United States full consent for the ousting of Hussein. Now, “the dilemma has produced an almost comical turn of events: the go-it-alone Bush Administration is desperately trying to lure the U.N. back into Iraq” (McGeary, 15 Mar 2004 Time).

If Hussein had been more compromising and willing to accept international mandates, then he would not have been overthrown. Furthermore, Iraq was not apart of a formidable military organization such as the North Atlantic Treaty Organization or NATO. Lack of international cooperation meant Hussein was not afforded protection against external threats such as the United States. But now, the United States faces the same problem of isolation that Hussein did, and in order of the United States to succeed in Iraq it must involve the international community.

In Federalism and Decentralization, the authors in The Size of Nations define decentralization as the subdivision of a nation’s government into local jurisdictions. Their definition of decentralization is synonymous with European federalism. “National governments normally do not provide all the public goods and are not responsible for every policy” (Alesina and Spolaore 137). Decentralization is considered an intermediate between a maze of overlapping jurisdictions and one-level-of-government-does-it-all.

The formation and attribution of responsibilities within federalist nations is based on costs versus benefits. The presence of costs, such as transaction, communication, and heterogeneity of preferences, lead to the creation of different levels of sub-national governments. Since “local governments are better suited at targeting local preferences” (Alesina and Spolaore 140), their attributed with the task of formulating public policies to appease their specific population.

To some extent, decentralization can be used in order to appease regions and avoid total secession. “Decentralization is, in this sense, a way of constraining Leviathans, particularly when geographical mobility is high” (Alesina and Spolaore 143). Geographical mobility refers to a populations ability to move from one location to another. If geographical mobility is high, then individuals can easily leave the territory under the control and reach of a leviathan. A leviathan can either lower taxes or provide regions with some political power, thereby providing incentives to particular regions in order to maintain power and extract the most rents.

“Iraqi politics, of course, encompasses far more than the simple interactions of its actors and institutions. Those interactions, while critical to understanding Iraqi politics and Saddam Hussein’s grip on power, are profoundly influenced by a variety of cultural, economic, and international factors. In many ways, it is these factors that determine the limits to Hussein’s power” (Palmer 328).

Iraq is a prime example of decentralization under a leviathan. The Kurds in the North were granted oil fields and autonomy after the 1991 Gulf War. Saddam Hussein could no longer impose his will on the Kurds due to the fear of international intervention. Hussein used oppression and fear to maintain his control on the Sunnis and Shiites.

The removal of Hussein will increase the degree of decentralization within Iraq because the absence of the oppressive glue will cause the different entho-religious pieces to fragment.

“Iraq’s best chance for survival is as a loose federation of at least two, but more likely three states - Kurdistan in the north, a Sunni Arab state in the centre, and a Shia state in the south. The central government would exercise relatively few powers - little more than foreign affairs and monetary policy” (Galbraith, 17 May 2004 Guardian Unlimited).

What would constrain decentralization in Iraq? Far from the current province outline and the different entho-religious groups; Islam is the most notable constraint.

“Across the world of Islam, governments have adopted varying degrees of self-representation in response to unique historical circumstances. Turkey is a parliamentary, secular democracy. Indonesia is one of the world’s largest republics, but an uncertain one as the nation still struggles to evolve a representative political system after decades of authoritarian rule. Iran is a theocratic republic with a growing democratic reform movement. Iraq is currently a case study in “nation-building” in the aftermath of the dictatorial regime of Saddam Hussein.” (Handwerk, 24 Oct 2003 National Geographic)

Even though the United States removed Hussein, it has also generated anti-American sentiments across Iraq and the Islamic world. On a cost-benefit level, it would be better for Iraq to decentralize and distribute power to specific provinces or states. However, decentralization will not occur if an Iraqi government is not established. I believe the involvement of the United Nations is critical in order to ensure a stable, credible, and decentralized Iraq.

In Size and Economic Performance, the authors dive into empirical evidence to see the implications of their model; the model of how the size of nations are determined. Two important implications were formed: “One is that economies of scale lead to smaller governments (in per capita terms) in larger countries. The second is that the effect of country size on economic success is mediated by the trade regime” (Alesina and Spolaore 172).

Economies of scale: bigger is better and cost decreases as size increases. In larger nations, government spending, in per capita terms, is lower and vice versa.

Returning to the classroom setting, take for instance the following situation: Two classes, (C1 and C2), C1 has 1,000 students and C2 has 2,000 students. In order to have an end-of-the-semester party, C1 needs one thousand dollars, while C2 needs one-thousand five hundred dollars. C1 students would have to fork over one dollar, while the C2 students just three-fourths of a dollar or seventy-five cents. What can be determined from this situation? Well, far from the apparent classroom overcrowding and the party not costing a lot, it is more advantageous to be in C2.

With regards to trade regime, larger nations do not benefit as much as smaller nations in a world of prefect free trade. Size can be mitigated on the economic policies a nation adopts. If a large nation is an isolationist, then it can fair well, but the same is not true for small nations. Furthermore, in a world were resources are scarce, large nations cannot be perfect isolationists, because no single industrialized nation contains all the resources it requires.

Iraq ranks 64th out of 266 nations in geographical size and 43rd out of 236 in population size. In conjunction with oil being its major export, Iraq would benefit from reducing its trade barriers. Saddam Hussein was the major impediment to Iraq’s economic growth, but with his removal and the establishment of a democratic government that embraces a open economy or “an economy that allows the unrestricted flow of people, capital, goods and services across its borders” (“Economics A-Z,” 2004 The Economist). Whether or not Iraq federalizes or fragments, I believe free trade policies would help the populous. Free trade allows for economic exchanges to occur more frequently and generate jobs and tax revenues. Jobs are essential to a strong and profitable economy and tax revenues can be used to provide the public the goods it needs, such as water, road and electricity.

Explaining the nine of areas of analysis and and elaborating on how their application to Iraq, I have produced an extensive examination into the size of nations and the size of Iraq. The following questions regarding the size of nations and the size of Iraq can now be answered.

First: What determines the size of nations and how does their size change over time? Ultimately, heterogeneity of preferences or differences within populations determine the size and lead to changes over time. Differences include: race, religion, language, political culture, economics and geographic locale. The crux of The Size of Nations is that borders are “human-made institutions” and can be studied using political-economic tools such as comparing the costs and benefits, economies of scale or scope, and decentralization. The preceding differences result in the formation of borders because human-made institutions are a result of human choices.

Second: Does a country’s size matter for economic success? It depends. Extreme one: in a world of closed economies, size is of the utmost importance. Extreme two: in a world of perfect free trade, size means nothing. In the real world, all nations are located somewhere in between the two extremes. Size does matter, along with political institutions, international organizations and defense power. Size is not essential for the success of a nation, however in an imperfect free trade world, it does not hurt to be big.

Third: What are the benefits of size versus costs of heterogeneity of preferences? Benefits of size encompass: greater production power, decreased per capita costs, a larger market and increased international bargaining power. Costs of heterogeneity consist of: forced assimilation, oppression, and both overt and covert conflict. Do the benefits outweigh the cost? In most cases, no. Nations tend to decentralize, or allocate power to sub-national levels of government to deal with specific populations. It is important to note that nations will always incur costs and the mission of a government should be to earn the maximum benefits for their public. However, some times the costs are great and in particular, leviathans seek to expand their personal wealth and ignore the needs of the public.

Past: How was the size of Iraq determined and maintained from the fall of the Ottoman Empire after World War I to the Saddam Hussein era? Following World War I, Iraq was carved out of the defunct Ottoman Empire and Britain gained control of Iraq at the San Remo Conference in 1920. From 1932, when Iraq gained its independence and until Saddam Hussein came to power in 1979, Iraq was under the rule of a monarch and experienced four coup d’etats, or military take overs of the government. Iraq would not be able to expand because of existing border constraints formed by the political lines drawn back in 1920 and so Iraq’s geographic size has been constant since the end of World War I.

Present: What are the short and long term impacts of removing Saddam Hussein? In the short term: chaos. Iraq does not have a legitimate, representative government and is under the occupation of the United States. The following prediction has come true: “There will be a flood of attention and widespread feeling of relief that Saddam has been captured,” says Thomas Mann of the Brookings Institution. “But if the attacks against U.S. and Iraqis continue, then I think that achievement will diminish”” (Page, 14 Dec 2003 USA Today). Removing Hussein from power was quick, but capturing took a bit longer.

Now, chaos continues to reign because the growing number of insurgents clashing with the United States is increasing because of growing dissent within the population.

In the long term: decentralization, increased economic activity, and potential internal conflict, but chaos will continue to perpetuate.

Furthermore, the recent prisoner abuse scandal is a major issue: “The scandal has dealt a serious blow to the coalition’s efforts to win over Iraqi hearts and minds. The images have been rebroadcast by Arab satellite TV channels, further inflaming anti-US sentiment in Iraq and across the Middle East” (“Q&A: Iraq prison,” 16 May 2004 BBC News). I believe the scandal has casted an ominous shadow over the United States’ occupation of Iraq and will perpetuate over time.

Future: Will Iraq be able to maintain its current size or will it fragment into separate nations? It depends. I have come to the conclusion from the previous nine areas of analysis that Iraq will maintain its current size. Fragmentation is possible, but decentralization is planned for:

“The document [Iraqi Interim Constitution] says the system of government in Iraq will be republican, democratic and pluralistic. It has a comprehensive bill of rights. It provides for a federal state with two official languages - Arabic and Kurdish. It says Islam will be the official religion and a source of law, but not the primary source of law. And it says it aims for women to make up 25% of the national assembly to be elected next year.” (“Q&A: Iraqi interim constitution,” 8 Mar 2004 BBC News)

The process of establishing a stable government is long, and becomes even longer when people are introduced. “The nature of the post-Saddam authority is slowly taking shape but it is a vexed process with different factions jostling for power” (Oliver, 2003 Guardian Unlimited).

What is the bottom line? Through the lens of The Size of Nations, costs and benefits form the foundation of what the size of a nation is, however the costs of heterogeneity are massive in the case of Iraq.

Iraq contains a diverse population with different entho-religious regions and individuals seeking power in the new Iraqi government. The United States is not alone in bringing a better life to the people of Iraq:

“The Madrid Donor’s Conference for Iraq (23-24 October 2003: http://www.comisionadoiraq.org/donors/index_ing.htm) launched the international effort to assist Iraq in its political, economic and social transformation and its rehabilitation and reconstruction. The Madrid conference also welcomed the creation of the International Reconstruction Fund Facility for Iraq managed by the United Nations Development Group and the World Bank. In Madrid, the European Union and the Accession Countries pledged more than €1.25 billion, mainly in grants, for Iraq’s reconstruction. Of this total, €200 million was pledged from the Community budget for 2003 and 2004 - €160 million for 2004. This pledge came on top of the €100 million in humanitarian assistance the Community set aside for Iraq in 2003.” (“Iraq: Commission,” 4 March 2004 European Union)

But the United States is far from securing the amount of support it needs to bring democratic institutions and peace to Iraq.

To conclude: the size of nations has been explained with ease, but in the real world, explanation is difficult and prediction is even more backbreaking. Iraq is different because it is an actual nation.

Utilizing the nine areas of analysis and introducing extraordinary situations, such as a constitution based on democratic ideals in a region were autocratic rulers reigned or the prisoner abuse scandal, explaining the current and future size of Iraq is ambitious. Too ambitious? Perhaps.

Reading The Size of Nations, presenting the theory and relating it to the real world has allowed me to gain excellent insight. I feel it is better to take action than to sit and do nothing. It is clear that the benefits of removing Saddam Hussein outweigh the cost and the size of Iraq will be maintained.

Iraq’s past, coupled with the present situation generates a future filled with road blocks, bombs and bloodshed, but it is important to remain optimistic.

Works Cited

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“Iraq: Commission sets priorities for aid in 2004.” European Union 4 Mar 2004. < http://europa.eu.int/comm/external_relations/iraq/news/ip04_303.htm>

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Alesina, Alberto and Spolaore, Enrico. The Size of Nations. Cambridge: The MIT Press, 2003.

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