Iraqi Federalism II - Answering Three Common Objections:

Critics of proposals for decentralized federalism in Iraq raise several standard objections. See this recent piece by Anthony Cordesman for a representative example (hat tip to an anonymous commenter on my previous post). Here, I answer three of the most important ones: distribution of oil revenue, the problem of local minorities, and the claim that federalism will lead to partition.

I. Distribution of oil revenues.

The vast majority of Iraqi economic production and government revenue consists of oil. Nearly all the oil is found in the Kurdish north and the Shia-majority south. Thus, majority-Sunni central Iraq might be left out in the cold. Fortunately, all three of the federalism proposals cited in my earlier post propose ways around this problem. The possible solutions are guaranteeing the Sunnis a share of the government's oil revenue (Biden), a privatization model that would give all Iraqis individual ownership rights over oil (National Review), or a combination of the two (my approach).

If any of these policies are put into effect, there will initially be problems of credible commitment. The Sunnis might fear that the Shiites and Kurds will renege on the commitment to give them their share of oil money. However, once the payments get off the ground, these concerns can be eased. The US, if it wants to, can give the Shia-led government strong incentives to make the payments happen. The Iraqi government is likely to remain dependent on US assistance for some time, and we could condition that assistance on compliance with the terms of the federalism deal. Moreover, once payments begin, the government will have a self-interest in continuing them because the alternative would be a civil war that is much more costly. Finally, under my approach and National Review's (privatized shares of oil stock given to each member of the population, regardless of religion and ethnicity), any attempt by the government to confiscate the shares of the Sunni population would be likely to undercut the market value of ALL shares, including those held by Kurds and Shia. Kurdish and Shia shareholders would thus have a common interest with the Sunnis.

II. Mixed areas.

Most parts of Iraq do not have homogenous populations. There are Shia living in Sunni areas, Sunnis living in majority-Kurdish areas, and so on. In a federal system, the rights of local minorities may well be threatened by the local majority. Of course this problem does not disappear under a highly centralized government. Ultimately, the parties will have to bargain out the exact boundaries between them, addressing disputed areas such as Kirkuk. Whatever the details of the final settlement, there will obviously still be local minorities. There are two ways to protect their rights: 1) judicial review under a central constitution that guarantees basic individual rights, and 2) mutual deterrence.

Both approaches should be tried, but I set more stock by the second, because the Iraqi judicial system is in its infancy and is likely to improve only very slowly. The Sunni authorities should be able to agree to protect Shiite and Kurd minorities in their midst in exchange for the latter protecting the Sunnis in their areas. Such an "exchange of hostages" model is not very inspiring, but it does give regional governments an incentive to respect the rights of local minorities. Here too, the US and its Coalition partners can play a role in enforcing the bargain by denying or reducing aid to regional governments that violate minority rights. Will it work perfectly? Of course not. But it is better than the alternatives of civil war or centralization. Under the latter, the dominant group in the central government would be able to oppress its rivals all over the country, not just in a few regions.

III. Federalism and partition.

Critics of decentralized federalism often claim that it will lead to partition. Some, like Cordesman in his NY Times piece, do not even seem to distinguish between the two. It is in fact the fear of a dominant central government dominated by one's enemies that leads to pressure for partition. Implementation of a strong form of federalism would dampen these fears, though probably not completely eliminate them. Realistically, the Kurds will not accept a highly centralized government of any kind (and I don't blame them). The Sunnis will not accept one dominated by the Shia, as is likely to be case if the government continues to be democratically elected (the Shiites are 60% of the population). By removing the threat of nation-wide domination by one group, decentralized federalism will reduce pressures for partition rather than increase it. This is especially likely in light of the fact that partition would leave all three major Iraqi groups vulnerable to the depradations of Iraq's unscrupulous and rapacious neighbors. Federalism is a way to capture the main benefits of partition, while mitigating its dangers.

Decentralized federalism is not a panacea for Iraq's many problems, but it does have important advantages over the alternatives of centralization, partition, and civil war.

Related Posts (on one page):

  1. Iraqi Federalism II - Answering Three Common Objections:
  2. Decentralized Federalism in Iraq:
Anonymous Jim:
I think there are merits to a stronger federalism in Iraq. I do worry about the effects of a semi-autonomous Shia region so close to Iran and the effects of semi-autonomous Kurdish region abutting Turkey (a NATO ally) which has a Kurdish problem of its own.
5.10.2006 8:23pm
You're assuming a long-term vision I'm not sure I'd grant the Iraqis. I'm not so sure some demagogue might not be willing to screw his constituents by confiscating Sunni shares, or put his co-believers/co-ethnics elsewhere at risk by bullying the local minorities, or push for partition as a 'waving-the-flag' issue. In fact, I think it's very likely considering the level of political sophistication and discourse there. The opportunity to screw everyone and score political points thereby is very large, and there are enough unscrupulous politicians out there to take it.
5.10.2006 10:04pm
DJ (mail):
I don't get it. The Sunnis have made it absolutely clear that they will not accept a decentralized, federal Iraq. It's a deal breaker for them--that's why the final status on the federal structure wasn't finalized in the Constitution. So this is all academic, right?
5.10.2006 10:53pm
Ilya Somin:
The Sunnis have made it absolutely clear that they will not accept a decentralized, federal Iraq.

Actually, some of the Sunni parties accepted the current constitution, which has considerable decentralization. Moreover, more might accept federalism if they got stronger assurances of a proportionate share of oil revenue and if more of them come to realize taht a return to Sunni domination of a unitary state is not a realistic option.
5.10.2006 11:30pm
Pio (mail):
Could a federal Iraq have more, smaller federal units instead of just the 3 large blocks? I think smaller units would have more of an incentive to keep the whole federation together, and at the same time would allow for different coalitions to form on different issues. This way, it wouldn't always be sunni v. shi'ite v. kurds. It would also stop any one faction from having veto power. It seems to me that most succesful federal systems (united states, germany, canada are what come to mind at the moment) seem to have more constituent units.

I am not, however, a political theorist, nor particularly knowledgable about Iraq, so if there is some major problem with this idea (theoritical or practical) feel free to point it out.
5.11.2006 1:32am
Tom Grey (Liberty Dad - Slovakia) (mail) (www):
Federalism is fine; smaller Canton sized units would prolly be better but the 18 provinces should be a good start. [from cia: 18 governorates (muhafazat, singular - muhafazah)]

The worst mistake was in accepting Proportional Representation -- party lists -- rather than geographic districts. Prop. Rep. is a main reason Slovakia split from the Czechs, and systematically encourages radical ethnic tensions: "our group" and "them".

A "Trust Fund" with monthly distributions to registered voters would prolly be better than "shares". The Voucher Privatization program in CSFR shows that most people who own small amounts of shares would rather have money.
5.11.2006 4:01am