NCPA - National Center for Policy Analysis

Costs and Benefits of War

April 2, 2003

It may seem absurd to suggest, but the war in Iraq could end up being an economic blessing for the Iraqi people, according to a new study by three University of Chicago professors.

The study notes that Saddam Hussein has been running the country into the ground for more than 20 years:

  • Per capita gross domestic product was $9,000 (in 2002 dollars) in 1979, the year Saddam Hussein solidified his power -- the most recent estimate puts per capita GDP at a little over $1,000.
  • Virtually the entire economy is controlled by the state, with little room for private business above the most primitive level.
  • The banking system in Iraq has collapsed and inflation is estimated at about 100 percent per year.
  • The Iraqi dinar was worth $3 as recently as 1983, whereas today $1 will buy 2,700 dinars.

Furthermore, the University of Chicago study estimates that more Iraqi civilians would die if the prewar situation had remained in place.

  • They estimate that at least 200,000 Iraqis would have died on top of the 500,000 that have already died at the hands of Saddam Hussein.
  • Moreover, they estimate that maintaining the prewar policy of "containment" would have cost the United States some $380 billion -- far more than the war is likely to require.

This suggests that the war is a win-win situation for both the United States and Iraq. We will pay less out of pocket and the Iraqi people will suffer fewer deaths and less privation at the hands of Saddam Hussein.

Source: Bruce Bartlett, "Costs and Benefits of War," April 2, 2003, National Center for Policy Analysis.


Browse more articles on Government Issues