Aco 052 0102

FROM RENTIER STATE TO FAILED STATE : WAR AND THE DE-
FORMATION OF THE STATE IN IRAQ
Rolf Schwarz
BSN Press | « A contrario »
2008/1 Vol. 5 | pages 102 à 113

ISSN 1660-7880
ISBN 2889010059
DOI 10.3917/aco.052.0102
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From Rentier State to Failed State:
War and the De-Formation of the State
in Iraq
Rolf Schwarz
102 The now famous dictum that «war makes states» has received renewed interest in recent
years with the experience of state-collapse and state-failure in many parts of the Third
World 1. Historical studies have shown that the activity of war-making was an essential
ingredient in the process of state-formation in early modern Europe 2. These studies
claim that the ability to get ready for war and then actually wage war requires power
holders to engage in actions that are very frequently conducive to state-formation. This
includes the effective extraction of resources for the purpose of war-making. Extraction
activity presupposes state control, which in turn requires an efficient bureaucracy 3.
In cases where there was nothing or little to extract from society, war-making also
required the promotion of capital accumulation which in turn made war-making
possible. This activity also required the growing strength of a centralised bureaucracy 4.
This paper analyses the history and dynamics of state-formation and state-building
in the Middle East and argues that «oil rentier states» 5 defy the «war makes states»

theory. The Middle East as a region has seen many inter-state wars and violent
conflicts, and war is perhaps even a defining feature of the region 6. This paper shows
1
Charles Tilly, «War Making and 3
Otto Hintze, «Military Organi- The Arab State, London:
State Making as Organized zation and the Organization of Routledge, 1990, pp. 85-98; Gia-
Crime», in P. B. Evans et al. (eds), the State», in F. Gilbert (ed.), The como Luciani, «Allocation vs.
Bringing the State Back In, Cam- Historical Essays of Otto Hintze, Production States: A Theoretical
bridge: Cambridge University New York: Oxford University Framework», in G. Luciani (ed.),
Press, 1985, p. 170. Press, 1975, pp. 178-215. The Arab State, op. cit.,
pp. 65-84).
2 4
Charles Tilly (ed.), The Forma- Charles Tilly, Coercion, Capital
6
tion of National States in Western and European States, AD 990-1990, John Waterbury, «The State and
Europe, Princeton: Princeton Oxford: Basil Blackwell, 1990. Economic Transition inthe
University Press, 1975; Thomas Middle East and North Africa»,
Ertman, Birth of the Leviathan: 5
Oil rentier states are those states in N. Shafik (ed.), Prospects for
Building States and Regimes in in which revenues from oil exports Middle Eastern and North African
Medieval and Early Modern Europe, contribute well over 40% of the Econo-mies: From Boom to Bust and
Cambridge: Cambridge Univer- state’s overall revenues (Hazem Back?, Houndmills: Macmillan,
sity Press, 1997. Beblawi, «The Rentier State in the 1998, p. 168.
Arab World», in G. Luciani (ed.),
a contrario Vol. 5, No 2, 2008

From Rentier State to Failed State: War and the De-Formation of the State in Iraq Articles }
that rentierism generally serves as an obstacle to the formation of strong and legitimate
states, since stability rests on an implicit social contract through which consent is
bought via material welfare. Where military capacity is in addition paid for by rulers’
rents and war-making employed as a strategy of state-making, as in Iraq, state-forma-
tion has nearly the opposite effects from ruler-subjects struggles that characterised
early modern Europe.
Rentier States
The notion of the rentier state grew out of the study of the modern Middle East 7. Ren-
tier states derive most of their revenues from the outside world and the functioning of
their political system depends to a large degree on accruing external revenues that can 103
be classified as rents. Rentier states rely on allocation and redistribution (allocation
states) and hence show a remarkably different political dynamic than other contrast-
ing states (production states). Rents have been defined as «the income derived from
the gift of nature» and are usually understood to be income generated from the export
of natural resources, especially oil and gas 8. The rentier effect in the Arab world con-
cerns both oil-exporting states and non-oil exporting states. A significant extent of the
rents of the oil states has been recycled to all Arab states through migrant workers’
remittances, transit fees and aid. The oil phenomenon has thereby «cut across the
whole of the Arab world» and propagated a new pattern of behaviour: rentier behav-
iour 9. Furthermore, external rents can also be conceived of as bilateral or multilateral
foreign-aid payments, such as foreign development assistance or military assistance,
and are hence sometimes termed strategic rents. These strategic rents form the major-
ity of state revenues in many small states in the global South and produce rentier state

behaviour 10. 7
Hossein Mahdavy, «The Pat-
terns and Problems of Economic
Development in Rentier States:
Generally, the rentier model of statehood is stable as
The Case of Iran», in M. A. Cook
the abundant availability of resources helps to preserve (ed.), Studies in the Economic His-
tory of the Middle East, London:
traditional loyalties through generous welfare allocations Oxford University Press, 1970,
and thereby renders state-formation into a legitimate pp. 428-467; Hazem Beblawi,
op. cit.; Giacomo Luciani, op. cit.
process. Political support is bought off – following the
notion of «no taxation, hence no representation» – and 8
Hazem Beblawi, op. cit., p. 85.
material legitimacy created. Resting on the economic 9

Ibid., p. 98.
function of the modern state in providing welfare and
10
Mike Moore, «Revenues, State
wealth to its citizens, this model of statehood remains sta- Formation, and the Quality of
ble as long as state and society adhere to an implicit social Governance in Developing Coun-
tries», International Political Sci-
contract between regime and society, through which ence Review, Vol. 25, N° 3, 2004,
political rights are substituted for state-provided welfare. p. 305.
Vol. 5, No 2, 2008 a contrario

{ Articles From Rentier State to Failed State: War and the De-Formation of the State in Iraq
Where citizens trust the state institutions to progressively provide these public goods,
they correspondingly tend to be more allegiant and less antagonistic to the regime.
Where citizens sense an appropriation of the state by a self-serving elite, trust in the
beneficial use of the natural resources of the country is lost, opposition emerges and
violent conflict ensues 11.
Taxation and state legitimacy

War-making and the capacity of the state to extract tangible and intangible resources
are seen as key indicators of the state’s capacity 12. The existence or non-existence of
strong states can hence be measured through the level of tax collection 13. Autocratic
104 governments are generally poor at raising direct taxes, since their collection requires
widespread voluntary compliance by citizens, as well as an efficient and legitimate
bureaucracy 14. Consequently, the more a state relies on direct measures of taxation, the
more the collection of taxes depends on an efficient bureaucracy and voluntary com-
pliance. In the absence of voluntary compliance, often linked to a lack of legitimacy,
states have to rely on other indirect measures to generate the necessary revenues. Oil-
exporting rentier states have the opportunity not to tax their populations or to impose
very minimal taxes if need be. In fact, most oil-rich rentier states have relied on a com-
bination of rents and minimal taxation for their state revenues. In the Arab Middle
Eastern countries, few states rely on direct taxation but do employ indirect means of
levying resources, such as tariffs, sales tax, and licensing 15. Where taxation is applied,
11
Rolf Schwarz, Rule, Revenue and Princeton: Princeton University indeed an important one:
Representation: Oil and State For- Press, 1992; Christopher Hood, «The true magnitude and signifi-

mation in the Middle East and North «The Tax State in the Informa- cance of the tax load have in the
Africa, Dissertation, University of tion Age», in T. V. Paul et al. past been concealed from the
Geneva: Graduate Institute of (eds.), The Nation-State in people. The fiscal principle would
International Studies, 2007. Question, Princeton: Princeton have to yield to the economic
University Press, 2003, p. 213; principle; the direct method of
12
State capacity is infrastruc- Christine Fauvelle-Aymar, raising state revenues should
tural state power, namely «the «The Political and Tax Capacity become the rule and the indirect
capacity of the state to actually of Government in Developing method the exception». See Knut
penetrate civil society and to Countries», Kyklos, Vol. 52, N° 3, Wicksell, «A New Principle of
implement logistically political 1999, p. 391. Just Taxation», in J. Gwartney,
decisions throughout the realm» R. Wagner (eds), Public Choice
14
(Michael Mann, The Sources of Christine Fauvelle-Aymar, and Constitutional Economics,
Social Power, Cambridge: Cam- op. cit., p. 406. London: Jai Press, 1988, p. 128;
bridge University Press, 1993, John Waterbury, «From Social
15
Vol. 2, p. 55) Rolf Schwarz, «The Political Contracts to Extraction
Economy of State-Formation in Contracts: The Political Economy
13
With respect to the view that the Arab Middle East: Rentier of Authoritarianism and Democ-
taxation capacity is the key test States, Economic Reform, and racy», in J. Entelis (ed.), Islam,
for state capacity, see Michael Democratization», Review of Democracy, and the State in North
Barnett, Confronting the Costs of International Political Economy, Africa, Bloomington:
War: Military Power, State, and 2008. As historians of taxation Indiana University Press, 1997,
Society in Egypt and Israel, have shown, this distinction is p. 171.

it is mainly levied on state-owned companies (mainly the oil industry) and foreign
companies. In other words, rentier states in the Arab Middle East have levied taxes on
themselves (the states’ agencies) and foreign corporations and not from the bulk of the
citizenry. Based on its modern history, Iraq is a classical rentier state that fits into the
broad Middle Eastern category in terms of non-taxation of citizens.
Iraq: From Rentier State to Failed State

The Iraqi state was created in 1920 in the aftermath of World War I. State-formation in
Iraq has followed the path of many developing states in its struggle against a major
foreign power (Great Britain) and the attempt to create a modern state administration
and representative institutions. Personalised rule, informal relations, and an abun- 105
dance of oil revenues defined the modern state that emerged. These three elements
were inherently linked as the abundance of oil revenues and the distributive capacities
of the state allowed for political rule to be personalised and based on patronage net-
works. Much of independent Iraq’s modern history of state-formation (1958-1980) has
followed the rentier state paradigm. The onset of the Iran-Iraq war in 1980, however,
started a new era: the state’s history was characterised by war, violence and ultimately
by the state’s deformation. The belligerent Iraqi oil rentier
16
Income taxes were first intro-
state’s attitude towards war making, marked by an overes-
duced in 1909 under Ottoman
timation of its military strength, proved to be particularly rule. After World War I they were
abolished and an income law was
catastrophic.
only reinstated in 1927. Modifica-
tions and refinements came
through laws no. 36 of 1939 and
While the early years of independent Iraq were charac-
no. 63 of 1943, and the passing of
terised by a reliance on domestic resource extraction 16, the

an intermediate law no. 85 in 1956
and eventually a regular tax law
discovery of oil in 1927, its subsequent development and
no. 44 of 1968. Up until the 1960s,
the nationalisation of Iraq’s oil industry in 1961 17, brought income taxes contributed mod-
estly to the ordinary budget,
Iraq on the path of a rentier state. The fiscal nature of the
ranging from between 3.4% to 5%
state changed in the 1950s as oil royalties were no longer depending on the year (Siham
Sharif, «Income Tax in Iraq», Bul-
treated as extra-budgetary receipts but were incorporated
letin of International Fiscal Docu-
into the budgetary process. This gave the state consider- mentation, Vol. 22, N° 12, 1968,
p. 543 and p. 549).
able financial resources, which it ploughed into social
welfare through a newly created state agency (the Iraqi 17
In 1927, exploration rights were
granted to the Iraqi Petroleum
Development Board) that was given the task of co-ordinat-
Company (IPC), which despite its
ing spending. The change in the fiscal nature of the state name was a British oil company.
Questions of nationalisation
brought about the first signs of a rentier economy (over-
came to the forefront after the
spending and a decline of the non-oil sector). Oil revenues revolution of July 1958; in Decem-
ber 1961 the Government seized
prior to 1962 were modest and increased to about 60% of
99% of the IPC and in 1973 it
total revenues during the 1960s and 1970s, while domestic become fully nationalised.

revenue extraction continued modestly 18. From 1973 onwards, however, the Iraqi fiscal
system showed clear signs of rentierism, with oil revenues ranging from 56% in 1972-
1973 to almost 86% in 1977 and taxes falling considerably in percentage relative to total
revenues. Taxes were still levied on personal incomes and profits of companies and, in
theory, rates were steeply progressive. In reality, taxes were only collected from
salaried employees of the state 19. The reach of the state was short and extended only to
its own salaried personnel. Agricultural incomes (except for land rentals) were
excluded from taxation and in the private sector taxes were only levied inconsistently
and inefficiently. In essence, personal income became the burden of a portion of the
middle class working in the state administration 20.
106
Apart from the increase in oil revenues from the mid-1970s onwards, Iraq also prof-
ited from earnings generated by assets held overseas. While these earnings remained
initially minor in relation to total revenues (4% in 1976), they sharply increased follow-
ing the second oil crisis in 1979 (the current account surplus stood at 3’360 million
dinars in 1979 and at 4’370 in 1980). At the beginning of the 1980s, Iraqi foreign hold-
ings had increased to a level where they represented 45% of oil revenues and 39% of
total government revenue 21.
Table 1 – Oil Revenues 1955-1977 as a Percentage of Total Revenues 22

Year 1950 1962 1970 1973 1977 Average
17.3 64.1 53.7 80.9 85.5 60.3
This drastic increase in additional resources allowed the Iraqi state to embark on a

state-building project based on large-scale spending implemented in a top-down fash-
ion and largely divorced from societal demands. The massive influx of oil revenues
18
Hossein Askari et al., Taxation 20
In the 1960s an individual had population paid any income tax
and Tax Policies in the Middle East, to earn nearly 7 times the per (Siham Sharif, op. cit.).
London: Butterworth, 1982, capita income (based on the year
p. 108. 1963) before being subject to a 21
Hossein Askari et al., op. cit.,
personal income tax. For a mar- p. 111.
19
In the mid-1970s, personal ried man with dependants under
the age of 18, earnings would 22
Source: John Waterbury,
income up to an annual level of
have to exceed 14 times the per
500 Dinars was theoretically sub- «From Social Contracts to Extrac-
capita income before tax assess-
ject to a 5% tax, gradually tion Contracts: The Political
ment would occur. Furthermore,
increasing for income between Economy of Authoritarianism
about 91% of all personal income
500-1’000 Dinars to a 10% tax. The and Democracy», in J. Entelis
tax paid came from residents of
tax drastically increased for the the province of Baghdad. The (ed.), Islam, Democracy, and the
richest of society, where income concentration of income tax State in North Africa,
above 15’000 Dinars was taxed at payers was so extreme that in Bloomington: Indiana University
75% (Idem.). 1966 less than 1% of the entire Press, 1997, p. 155.

during the 1970s enabled the Iraqi regime to pursue a policy of «guns and butter» –
extravagant spending on expanding its military-security machinery and on welfare
benefits (social development) 23. Internally, expanded military-security expenditure
was designed to strengthen the power of the ruling Ba’thist regime. On the external
front, it was used to engage in aggressive foreign policies, which led to the outbreak of
war with Iran in 1980.
Given the massive flow of oil revenues, the costs of a war with Iran seemed easy to
bear. Surplus funds also came in the form of strategic rents (foreign military aid) from
neighbouring states. During the first two years of the war, Iraq’s economic situation
was comfortable. It used its oil exports of 3.5 million barrels a day and an annual oil 107
income of 30 billion US$ to finance the war effort 24. As the war dragged on, Iraq’s eco-
nomic position began to deteriorate as a result of the partial destruction of its oil-
export facilities in the Persian Gulf (Mina al-Bakr and Khawr al-’Umayya), the decline
in world oil prices 25, and the closing of a pipeline by Syria running through its terri-
tory to the Mediterranean Sea. The total costs of the war, which lasted from 1980-1988,
are estimated at 452.6 billion US$ for Iraq and 644.3 billion for Iran 26. These numbers
exceed the total amount of oil revenues both countries have accrued since they started
selling their oil by a total of 678.5 billion US$ 27.
During the war, the failing Iraqi economy was maintained by strategic rents com-
ing from Saudi Arabia, Kuwait, and the United Arab Emirates (UAE). In public
rhetoric this foreign aid was downplayed or denied, and official reports of the Ba’th
party stressed the boldness of the Iraqi leadership in standing alone against Iran 28.

This official government propaganda explains why Iraq prolonged its war effort
despite growing human and economic losses. The regime of Saddam Hussein was
convinced that it would achieve victory single-handedly, while the costs of the war
were shared by the neighbouring Arab states, particularly the oil monarchies in the
Gulf. Iraq insisted that no official debt arrangements should be made to accommodate
23 24 26
The welfare benefits allocated Isam Al-Khafaji, «War as a Kamran Mofid, The Economic
to society in the form of state- Vehicle for the Rise and Demise Consequences of the Gulf War,
provided jobs have been enor- of a State-Controlled Society: London: Routledge, 1990.
mous. At the end of the Gulf War The Case of Ba’thist Iraq», in
27
in 1991, the civilian branch of the S. Heydemann (ed.), War, Institu- Peter Sluglett, Marion Farouk-
state employed 21% of the work- tions, and Social Change in the Mid- Sluglett, «Iraq Since 1986 :
ing population and 40% of Iraqi dle East, Berkeley: University of The Strengthening of Saddam»,
households depended directly on California Press, 2000, p. 273. Middle East Report, N° 167, 1990,
government payments (see: Toby p. 20.
25
Dodge, «US Intervention and The price of a barrel of oil
28
Possible Iraqi Futures», Survival, dropped from 27 US$ in 1985 to 15 Isam Al-Khafaji, op. cit.,
Vol. 45, N° 3, 2003, p. 107). in early 1986. p. 273.

the war effort. In short, war seemed an economically rewarding activity, a vision,
which in hindsight could not have been more off the mark.
By the end of the war, Iraq was faced with many economic difficulties, not least the
problem of demobilising almost 750’000 soldiers. Furthermore, it became impossible
to accommodate such a large number of soldiers that depended on government-
guaranteed jobs and welfare benefits. The state could no longer deliver on its implicit
social contract established during the boom of the rentier years. War had fundamen-
tally altered the situation and redefined the terms of normality. Unemployment,
already felt during the war due to the privatisation measures enacted in 1986-1987, but
108 aggravated thereafter, became widespread in Iraq and young people were deprived of
previously guaranteed careers in the civil service. The only solution seemed to keep
them in the public sector, not in a civilian function but in the military service.
The Iran-Iraq war undoubtedly eroded the fiscal basis of the state. Probably, a few
years of peace and normal oil-production would have brought Iraq back to pre-war
levels, but instead of using an inward-looking strategy of coping with the fiscal crisis
brought about by the Iran-Iraq war, the Ba’thist regime of Saddam Hussein chose a
belligerent strategy of rent acquisition 29.
Through much of Iraq’s modern history, the Ba’th party had dominated almost all
facets of life. The party’s stated aim has been to unify the Arab region between the
southern edge of the Taurus and Zagros mountains and the Gulf of Basra, the Arab Sea,
the Abyssinian highlands and the Sahara in the south; between the Gulf and the

Atlantic Ocean. It was a shrewdly calculated project of pan-Arabism under the hege-
mony of the Ba’thists. While in theory this was understood to encompass peoples of dif-
ferent religious and ethnic origins, such as Shiites or Kurds, it translated in reality into
the emergence of two Ba’th parties, one in Syria and one in Iraq, both claiming to be the
legitimate successor of the original party. When in 1968 the Ba’th party seized power, it
tried to consolidate its grip on the state by presenting a Pan-Arab ideology that min-
29
imised the religious and ethical divisions in Iraqi society.
Peter Sluglett, Marion Farouk-
Sluglett, op. cit.
30 Inventing a state ideology and a distinct Iraqi identity

Adeed Dawisha, «Footprints
in the Sand: The Definition and detached from tribal, ethnic and religious considerations,
Redefinition of Identity in Iraq’s
Foreign Policy», in Sh. Telhami,
proved to be very difficult. Under the rule of Saddam Hus-
M. Barnett (eds), Identity and sein a clear and conscious design of «intellectual and
Foreign Policy in the Middle East,
Ithaca: Cornell University Press,
political reorientation towards Iraq» was pursued 30.
2002, p. 129. This included the attempt to portray Iraq as an Arab state

and particularly that Iraq’s territory formed part of the Arab homeland. By emphasis-
ing Iraqi territory and not the Iraqi nation, an attempt was made to pay tribute to the
ethnic and religious heterogeneity of the country. In a speech to Iraqi Officers in 1978,
Saddam Hussein made the following declaration:
«We should support our theory by referring to ancient history and should stress that
the history of the Arab nation [al-umma al-’arabiyya] extends to ages long past. All
basic civilisations that developed in the Arab homeland [al-watan al-’arabi] express
the personality of the sons of the nation stemming from the same offspring (…) and if
these civilisations have a national specificity [al-khususiyya al-wataniyya], this is
part of the more general and encompassing national characteristic [al-sima al- 109
qawmiyya al-a’amm wa-al-ashmal].» 31
By using the term watani for both the Arab homeland and a smaller distinct entity
(the Iraqi territory and not the Iraqi people), Saddam Hussein laid the basis for an
ideology attached to an Iraqi state. In another speech he underscored the crucial dis-
tinction that Iraq was part of the Arab homeland, and not that the Iraqi people part of
the Arab nation 32. This political strategy of creating a national ideology attached to the
Iraqi territory was used in spite of the Second Gulf War (1990-1991) and the ensuing
Kurdish uprising. During the Gulf War period Saddam Hussein appealed to Kurdish
leaders to co-operate with his regime by stressing 6’000 years of common history of
the «Iraqi territory and people» 33. The continuous link between modern Iraq and the
ancient civilisations that had resided in the same land was also diffused through
cultural programmes that eulogised the achievements of Sumeria, Akkadia, Babylon,

and Assyria, as well as through archaeological works that
reconstructed such ancient cities as Hatra, Assur, Nin- 31
Ulrike Freitag, «Writing Arab
34 History: The Search for the
eveh, and Babylon . This equation between modern Iraq
Nation», British Journal of Middle
and ancient Mesopotamia continued into the 1990s with, Eastern Studies, Vol. 21, N° 1, 1994,
p. 31.
among other things, the publication of the best-seller
novels (suspected to have been written or sponsored by 32
Idem.
Saddam Hussein himself ) depicting the Iraqi ruler as a 33

Ibid., p. 32.
king in the tradition of the great kings of Mesopotamia 35.
34
Adeed Dawisha, op. cit., p. 129.
With the domestic fiscal crisis of the 1980s com- 35

Ofra Bengio, Saddam’s Word:
The Political Discourse in Iraq,
pounded by the external war with neighbouring Iran and
Oxford: Oxford University Press,
the invasion of Kuwait, this political strategy came to be 1998; Ofra Bengio, «Saddam
Husayn’s Novel of Fear», Middle
questioned from within, namely through the Kurdish
East Quarterly, Vol. 9, N° 1, 2002,
revolt in 1991. An extended, pp. 9-18.

parallel political strategy employed by the regime of Saddam Hussein included a novel
emphasis on the religious roots of Iraq as an authentic Islamic state, the reconstruc-
tion of the ancestral root of Saddam Hussein as a descendant of the family of the
Prophet Mohammad, and finally a return to traditional elements such as tribal loyal-
ties and the Iraqi heritage of the ancient civilisations of Mesopotamia. Throughout the
Iran-Iraq war, Hussein emphasized Iraq’s adherence to the fundamental principles and
canons of Islam. For instance, one of the country’s newspapers, al-Thawra, attacked
the Iranian leadership for accusing Iraq of being un-Islamic:
«We tell you that Iraq is a true Islamic state, and the people of Iraq, as well as its lead-
110 ers, believe in God and in the teachings of Islam as a religion and as a heritage. Indeed,
President Hussein’s regular visits to the holy shrines and his continuous efforts to pro-
vide for these shrines is a clear proof of his deep and his unequivocal belief in the glori-
ous message of Islam.» 36
Other references to Islam and the unity of Iraq were constantly made during the
Kuwait crisis and the subsequent Gulf War in 1991. In November 1990, Saddam told a
CNN reporter that:
«It is impossible for us to capitulate to those who bring together 400’000 soldiers
against us, because we put our trust in Allah […]; Saddam Hussein is an Arab citizen,
a servant from among God’s believing servants; he struggles [yujahid] for justice
[haqq] and rejects oppression [zulm] and fears only God.» 37

On another occasion, in November 1990, Hussein spoke in a reassuring vein:
«Do you know why the Iraqis are confident? Because they are a people who believe in
God, and they are sure that justice is on their side. He who walks along the path of
justice, God is with him; and he who has God on his side, what would he fear.» 38
Furthermore, there were continuous references to the 1990-1991 Gulf war as a Jihad
(struggle in the path of God) fought in the name of God.
36
Al-Thawra, 16.01.1982, as
Strikingly, this reference emerged immediately after the
quoted in Adeed Dawisha, op. cit.,
p. 133. invasion of Kuwait and even before actual hostilities
37
erupted 39. The Islamisation process peaked on the eve of
Ofra Bengio, op. cit., p. 183.
the Gulf War, when Saddam Hussein ordered the famous
38
Idem.
Islamic chant Allahu akbar (God is the greatest) to be
39
Ibid., p. 187. inscribed on the Iraqi flag.

New forms of political legitimacy under Saddam Hussein included also the cultiva-
tion of a personality cult, including the emphasis on the noble origin of President
Hussein’s family and his ancestral root in the ancient land of Iraq. As an illustration of
the former, it was reported that in August 1990, a few days after the invasion of
Kuwait, Saddam Hussein sent a message to President Mubarak of Egypt, indicting him
for aligning with the United States and Saudi Arabia against Iraq. In this indictment,
Saddam Hussein alluded to Mubarak’s underclass origins from a peasant family not
connected with the families of Egypt’s historic rulers. He contrasted this with his own
origin from a most illustrious family ancestrally traceable to the Quraysh, the tribe of
the Prophet Muhammad; Saddam Hussein even claimed direct descent from the
Prophet’s grandson Husayn 40. There were also several examples of Saddam Hussein’s 111
use of rhetoric equating himself with Iraq, with Iraqis and with Arabs everywhere.
Some of these expressions include: Saddam al-Arab (the 40
Ibid., pp. 79-80.
Saddam of the Arab); Saddam al-Fath (the Saddam of con-
41
Ibid., p. 78.
quest); Baba Saddam (Father Saddam) and Abu al-Iraq al-
jadid (Father of the new Iraq) 41. While such rhetoric was 42
In official speeches, Saddam
Hussein switched between
meant to evoke feelings of closeness, others were con-
Modern Standard Arabic and
ceived reverence and idolize Saddam Hussein (e.g. his Iraqi dialects in order to create a
sense of closeness with the peo-
alleged descent from the Prophet Muhammad), elevating
ple and his listeners. One such
him to the realm of the superhuman and the example is given in Nathalie
Mazraani, «Functions of Arab
supernatural 42.
Political
Discourse: The Case of Saddam
Hussein’s Speeches», Zeitschrift
Finally, the Iraqi regime under Saddam Hussein
für Arabische Linguistik, Vol. 30,
invoked other more traditional identities and images of

1995, pp. 22-36.
the state in order to legitimate its rule. These included a 43

Amatzia Baram, «Neo-Tribal-
renewed emphasis on tribal elements and the portrayal of ism in Iraq. Saddam Hussein’s
Tribal Politics 1991-1996», Inter-
modern Iraq in the tradition of ancient civilisations such
national Journal of Middle Eastern
as Assyria or Babylon. On 29 March 1991, after the violent Studies, Vol. 29, 1997, p. 7.
suppression of the local revolts in the aftermath of the 44

In the realm of tribal justice,
1991 Gulf War, Saddam Hussein received a delegation of one can speak of the existence of
a parallel legal structure. Tribal
tribal leaders for the first time. The timing of this visit in
law included compensations for
the context of the evolving politicisation of tribal identity murder (diya or blood money) or
disgraceful acts (hasham) and
was not arbitrary: it reflected the regime’s need for soci-
became a common feature in
etal support 43. The following years saw an emphasis on some part of Iraq, thereby sup-
planting state law (M.N. Kadhim,
tribal values, such as the new-found justification for the
Reaction to Crime under Tribal Law
invasion of Kuwait in terms of tribal honour (al-sharaf al- and Modern Codification in Iraq,
D. Phil. thesis, Oxford University:
ashairi), and an increasing reliance on tribal justice over
St. Catherine’s College, 1961;
the state’s legal system 44. Amatzia Baram, op. cit.).

As these examples show, Iraq represents a remarkable case of how an image of the
state was created in order to legitimise the political rule of an authoritarian leader who
faced economic and fiscal crises due to extravagant policies of social welfare and war-
making during the oil boom. Most striking in this regard is the constant presence of
the past and the shift from a secular idiom to a language dominated by Islamic and
tribal rhetoric. Similar tendencies of religious legitimacy of political rule are discern-
able elsewhere in the Middle East, notably in Saudi Arabia and Iran.
In sum, the case of Iraq prior to the dismantling of state institutions in 2003
demonstrates how a chain of reaction caused the deformation of the rentier state: ini-
112 tial war-making (the Iran-Iraq war) led to overstretched state capacity; and the ensuing
fiscal crisis led to a further weakening of the state and pushed the regime to bellicosity
– the annexation of oil-rich Kuwait to shore up Iraq’s rentier resources. The concerted
military action by the international community and the subsequent regime of United
Nations’ sanctions left the Iraqi state crippled. Having lost the first Gulf War to the
United States-led multinational force, the government of Saddam Hussein was ham-
strung with multiple international sanctions and as such could only exercise limited
domestic sovereignty. The weakened Iraqi state had to re-create new forms of legiti-
macy by resorting to Iraqi nationalism based on tribal affinities and Islamic religion,
to counter the persistent surveillance and encroachment of the powerful external
adversaries led by the USA. This bellicose public discourse proved counter-productive
in the long term, as Iraq’s supposed military capacities were one of the reasons for the
violent regime change in 2003 and the total collapse of the state in the aftermath of the
invasion.

Conclusion
This paper has provided a case study of rentier states in the Middle East and has
argued that it is oil rents and not war-making, as often assumed, that is the driving
force of state-formation and state-building. Generally, oil rents serve as an obstacle to
the formation of strong and legitimate states, since stability rests on an implicit social
contract through which consent is bought via welfare provisioning. Where oil rents
have been used, as in Iraq, for war-making and where military capacity was paid for by
rents, state-formation had nearly opposite effects from the ruler-subjects struggles
that characterised early modern Europe. The abundance of oil revenues in the case Iraq
facilitated an unsustainable degree of militarization that was not matched by the eco-
nomic and institutional strength of the state beyond the rentier windfall. The overesti-
mation of its rent-dependent military capability and the consequent over-stretching
of its military capability in actual war-making rendered a destructive blow in the Iraqi

context. The combination of rentierism and war-making was particularly deadly to the
Iraqi state, as it contributed to the deformation and collapse of the state.
Theoretically, this paper has made the case that the role of institutions of organised
violence in the process of state-formation (war-making as state-making), the rentier
nature of most Arab states (rentierism), and the interplay between domestic pressures
for state-formation and external influences are intertwined. Focusing solely on the
war-making capacity and orientation of states has the danger of trivializing other
important dynamics linked to the rentier nature of the states in the Arab Middle
East 45. Based on the notion of «no taxation, hence no representation», most rentier
states of the oil-rich Middle East rely on oil rents and not on domestic sources of 113
resource extraction (taxation). We have shown elsewhere that the more a state relies on
direct measures of taxation, the more the collection of taxes would depend on an effi-
cient bureaucracy and voluntary compliance of citizens 46. Tax paying citizens invari-
ably seek to hold the state to a high level of accountability, and in addition, make
demands for greater political rights and civil liberties. The non-tax revenue base of
Middle Eastern rentier states tends to hinder an active engagement with the citizens
and with society, based on the principle that revenue extraction invariably provokes
demands for political rights and responsive representation. The resulting state struc-
tures are therefore largely divorced from society; they are as such not strong enough
to actively cope with societal demands in times of crises. Only if concrete policies to
attract non-oil revenues are pursued in the long run can the rentier bargain be over-
come and effective state structures created. In the absence of this, rentier states may
turn into failed states, as evidenced in Iraq.

a
45
Charles Tilly, «War and State
Power», Middle East Report,
Vol. 21, N° 171, 1991, pp. 38-40.
46
Rolf Schwarz, 2008, op. cit.

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FROM RENTIER STATE TO FAILED STATE : WAR AND THE DE-

FORMATION OF THE STATE IN IRAQ

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material legitimacy created. Resting on the economic 9

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Taxation and state legitimacy

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Table 1 – Oil Revenues 1955-1977 as a Percentage of Total Revenues 22

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30 Inventing a state ideology and a distinct Iraqi identity

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Saddam Hussein himself ) depicting the Iraqi ruler as a 33

With the domestic fiscal crisis of the 1980s com- 35

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the state in order to legitimate its rule. These included a 43

suppression of the local revolts in the aftermath of the 44

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