Iraqi Economists Network

شبكة الاقتصاديين العراقيين

Corropution & Governance IssuesLatest Publications

Iraq: The Political Economy of Corruption. By Jonathan Burden *

Recent protests in Iraq have demanded an end to rampant state corruption, the removal of foreign influences from Iraqi politics and the proper provision of public services.


State-Society Relations in Iraq

The causes of these demands are partially shaped by the myriad militia groups that began to emerge at the end of the Ba’athist era in 2003. They took on greater prominence in response to the threat of ISIS to Iraq’s Shi’a. The most significant of these groups, operating under the Shi’a dominated umbrella of the Popular Mobilization Forces (PMF, or Hashd al-Shaabi), utilise patronage links with Baghdad to support illicit economic activit ythat deprives wealth of the majority of Iraqis. Iraq’s state-society relations, therefore, entails that political elites in Baghdad ‘maintain relationships with state-sanctioned armed groups’ to buttress the power of the central state and resist inclusive government or wide-spread economic prosperity. 


Extortive economic practises

One way in which PMF have spread their influence across the country is by managing and taxing smuggling networks. These networks formed in the late 1990s as Saddam Hussein’s Ba’athist regime sought to circumvent the comprehensive sanctions regime imposed by the United Nations Security Council and generate revenue from crude oil. In the decade after the 2003 invasion, many of the Ba’athist officials that had smuggled oil for Saddam joined ISIS and operated along the same routes, reportedly generating $1 million per day at its peak. As early as 2007, Shi’a militias were also reported to have taken over some of the old Ba’athist routes and they now maintain significant smuggling routes to and from IranSyria, and Turkey. Basra, Iraq’s leading oil-producing province, which has been central to the protest movement that began in 2018 is reportedly ‘run by mafias’ who operate a rentier economy that fails to translate the density of resources in the area, into widespread economic gains.

Checkpoints also generate income along the traditional smuggling routes run by a mixture of PMF brigades (such as the powerful Kataib Hezbollah, the Badr Organization, Asaib Ahl al-Haq and Saraya al-Salam). It is further supported by federal police, Iraqi Security Forces, and Sunni tribal militias. Taxing the route from oil-rich Basra to the Jordanian border is a vital source of income that operates with the implicit support of the state.

Asaib Ahl al-Haq, for example, reportedly generates $300,000 per day through checkpoint fees across Diyala Province.  The political economy of Iraq is therefore structured such that state officials in Baghdad benefit from the extractive economic practises carried out by armed, non-state groups who in return gain via patronage links to the central state. For example, the influential PMF, the Badr Organisation, is the military wing of the Fatah party which holds 48 seats in the Iraqi Parliament.

As a result, the PMF can draw $2.17 billion from the federal budget (reportedly twice the amount available to Kurdish Peshmerga forces), to employ 128,000 personnel. Consequently similarities between Lebanese Hezbollah and the Iraqi militias are be constructed. Despite former Prime Minister Adil Abdul Mahdi issuing a decree in July, which ordered the PMF to vacate their headquarters and formally integrate into the state’s security forces, they have continued to entrench their influence over the state and the rest of the country.

The nexus between these non-state actors, the central government and activities such as smuggling and extortion is therefore central to the political economy of contemporary Iraq. Iran’s alignment compounds the problem with the powerful militia groups.


Iran’s role

Despite the decentralised and diverse nature of the PMF, the most significant groups profess an ideology of Islamic Revolutionism. This is in line with Iran’s Qud forces which is the foreign arm of the powerful Islamic Revolutionary Guard Corps (IRGC). The head of the Popular Mobilisation Committee and Kata’ib Hezbollah, Abu Mahdi al-Muhandis, previously served with the IRGC against Ba’athist Iraq. The Badr organisation, which was created as a formation of the IRGC during the Iran-Iraq War has a long history of allegiance to Tehran. Furthermore, newer, emerging groups are thought to have even closer links to the IRGC  than Badr, suggesting a significant Iranian role in the activities of the PMF.

In April, the IRGC and the Quds Force were designated as a terrorist entity by President Trump. Kata’ib Hezbollah, which was a prominent anti-US militia, has held the status since 2009. The designation, which forms part of President Trump’s ‘maximum pressure’ campaign against Iran, may have paradoxically harmed US strategic interests in Iraq. Broadly stated these are to leave Iraq internally stable and free of foreign (read, Iranian) interference. However, with the economic sanctions that come with being designated a terrorist organisation by the US, the PMF’s commercial interests have become more closely aligned with Tehran and the IRGC’s. Unable to access global markets, there is more incentive to maintain the so-called ‘rentier economy’.




The system based on patronage links between the state and militias with external connections, which incentives an extortive economy of ‘embedded violence’ has generated many of the grievances that are driving the current protest movement. This also partially explains why the PMF has been instrumental in repressing these brutal protests – over 300 people have died and 15,000 have been injured. Consequently, the structure of Iraqi governance which generates the incentives for militias to maintain extortive economic practises needs to be addressed before the demands of the protestors can be met.

However, the extent to which these networked links have embedded themselves into Iraqi society implies that the problem of corruption and foreign interference will not be solved by simply replacing the current political elites but will require a bottom-up reconfiguration of much of the economy.

(*) Jonathan Burden has a Masters in Middle Eastern Studies and a Bachelors in Philosophy, Politics and Economics, both from the University of Exeter. He currently works as a researcher at Clarion Defence and Security. Jonathan’s primary interests are international relations, terrorism, conflict, security, political economy and the wider geopolitical context of the Middle East. As a British native, he is also concerned with the UK’s global role after Brexit.

Source: Global Risk Insight,




Comment here

%d bloggers like this: