Iraq’s Oil Wealth

IRAQ’S OIL WEALTH….The New York Times has an article today about a topic that keeps popping up: an oil trust fund for Iraq that pays a portion of oil revenues directly to the citizens of Iraq. It’s loosely based on the trust fund set up in Alaska that pays about $1,500 to each resident these days.

One of the ideas behind this is that the money should be kept out of the hands of the central government, where in the past it’s been used for starting wars and building palaces. That seems like sound thinking to me.

But how about another idea? Instead of just doling the money out to individuals, why not make oil revenue a cornerstone of local government financing? I don’t know precisely how Iraq is divided into administrative districts (or will be divided, I suppose I should say), but why not give the money to villages, cities, and provinces instead? This would give them a stable funding base, provide them with some level of autonomy from the central government, allow them to spend the money on local needs, and promote cooperation between provinces that want to pool money for projects. It also gets us away from just writing checks to individuals, which strikes me as a vaguely bad idea.

Obviously I’m speaking from profound ignorance here ? hell, that might as well be the name of my blog ? but I think it’s curious that I’ve never heard this kind of thing proposed before. It fits well with the idea of a federalist Iraq that seems to be popular with a number of experts (though apparently not with the Bush administration), and therefore seems like it has merit. Then again, perhaps there are serious problems with the idea that just haven’t occurred to me.

Just a thought.