Both liberal democratic Senator Joe Biden and the conservative National Review have recently published articles arguing that decentralized federalism is the way forward in Iraq, and the best policy for addressing that country's serious ethnic and religious conflicts. Hopefully, a broad consensus will emerge on this point in the United States and (more importantly) in Iraq itself.

I published a piece making a similar argument in a supplement to the Iraqi paper Al Sabah last year. The English language version is available here.

UPDATE: Many people, both in the US and in Iraq, confuse decentralized federalism with partition of the country into three separate states (Sunni, Shiite, Kurdish). In reality, federalism is an ALTERNATIVE to partition, not a synonym for it. Like partition, it has the advantage of enabling each of the three groups to avoid total domination by any of the others. Unlike partition, it avoids breaking up Iraq into three relatively weak nations that would be easy pickings for Iraq's rapacious neighbors. The other alternatives to partition are probably dictatorship or civil war. Despite the very serious attendant risks, I don't think that partition should be categorically ruled out for all time. But, at the very least, we and the Iraqis should try federalism first.

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.