Statebuilding versus state formation: the political economy of transition in Iraq and Libya

The international interventions in Iraq and Libya are exemplary of a decline in the expectations that statebuilding fervour can contribute to the full-fledged transformation of societies intervened upon. From the intervention in Iraq under the banner of “armed liberalism” to the “post-interventionist” approach that guided the intervention in Libya, international actors have renounced the grand transformative narrative traditionally sustaining post-conflict initiatives. This study investigates the impact of this changing statebuilding paradigm on state formation in Iraq and Libya. Bridging scholarship on post-conflict transitions as well as on the Middle East and North Africa region, this study addresses the question of the interplay between statebuilding and state formation from a political economy perspective: the emerging forms of economic governance of Iraq and Libya are illustrative of the broader problems affecting these countries. Through a process-oriented approach, this study moves beyond a narrowly-conceived institutional analysis and brings into focus actors in transition. Based on the theoretical discussion and the empirical findings, the study shows that an actor-oriented analysis has far more explanatory power than an institutionalist analysis. From a political economy perspective, the study focuses on the role of the private sector as an agent for change in transition: the emergence and consolidation of the policy prescription of developing the private sector has heralded a re-definition of the statebuilding agenda. Relying on a broad range of sources and data including interviews, policy papers, programmes’ reports, and evaluations, the analysis contends that this novel approach adds to the contradictory character of statebuilding: private sector development remains trapped between internationally held normative models and domestic power dynamics. Most importantly, private sector development entails a more interventionist approach that contradicts the principles of the self-regulating capacity of the market. The thesis’ main argument is that by building parallel agencies and mechanisms, statebuilding deviates from the process of building states. In other words, statebuilding creates a mode of governance that undermines Weberian notions of statehood in post-conflict countries: while it penetrates deeply into society, statebuilding fails to generate state authority. Rather, it favours a dispersion of authority across levels of governance and different types of actors. The dispersion of authority in post-conflict transitions generates hybrid forms of political economy: adaptation and resistance to neoliberal norms, institutions, and models are continuously negotiated by competing actors. At the same time, the dispersion of authority contributes to undermining the distinction between the public and the private spheres: alternative forms of authority consolidate informal institutions and repertoires, and increasingly come to exercise state authority and functions. The disjuncture between state and stateness––the exercise of state authority and functions––shows the limits of analysing post-conflict transitions through the narrow lens of Weberian interpretation of the state and points to a re-evaluation of institutional analyses in light of notions of authority and legitimacy.