Few issues have been as disruptive to Iraqi politics since the establishment of the post-2003 state as the question of federalism. The subject of power-sharing and the relative balance of authority between the federal government and its regional and provincial counterparts has been a source of constant dispute. It has particularly coloured relations between the federal government in Baghdad and the Erbil-based Kurdistan Regional Government (KRG), with both contesting the independent authority claimed by the other. But, in recent years, the question has also affected federal–provincial ties, as the two sides have disagreed over the extent to which administrative, financial and security power should be devolved.
In many ways, the issue is a legacy of history. Federalism was introduced as a model for Iraq by opponents of Saddam Hussein as they organized against his regime after the 1991 Gulf War. Decentralization was regarded by the majority of these groups as a way to avoid a repeat of the tyranny of his government, with its heavily centralized system. But federalism also represented an acknowledgment that Kurdish moves to self-rule after 1991, and the Kurds’ historical sense of injustice and insecurity in a Baghdad-run entity, would have to be taken into account in a new Iraqi state.
The main challenge throughout – and the main focus of this paper – has been how to reconcile Kurdish demands for a loose, confederal system where competent authority would largely reside at a sub-national level, with the more limited decentralization envisioned by many non-Kurdish parties, where a government in Baghdad would retain a significant amount of independent sovereign authority. Although the 2005 constitution backed a devolution of powers to regions and provinces along the lines that Kurdish leaders envisaged, flaws in the document and the need for supporting legislation have allowed successive governments in Baghdad to resist limits on the power of the federal government. Meanwhile, efforts to reach a formal compromise between Baghdad and Erbil have failed.
Although the 2005 constitution backed a devolution of powers to regions and provinces along the lines that Kurdish leaders envisaged, flaws in the document and the need for supporting legislation have allowed successive governments in Baghdad to resist limits on the power of the federal government.
This research paper is primarily based on almost two decades of the author’s personal engagement and interviews with senior stakeholders as well as a Chatham House nationwide survey. As the paper shows, Kurdish insistence on a maximalist interpretation of the constitution and the federal government’s determination to preserve its broad authority in the rest of Iraq has produced an enduring stalemate. This has been characterized by legal uncertainty and repeated political confrontations between Baghdad and Erbil, with the latter veering between efforts to establish the basis for eventual independence and moves to consolidate its position within the Iraqi state. Although circumstances have forced temporary compromises on financial and revenue-sharing mechanisms, both sides – and especially the KRG – have stuck to maximalist demands, even though the lack of political will to agree on a mutually acceptable federalism formula has cost both sides materially.
This paper argues, however, that the status quo that has emerged as a result of this ongoing dispute may offer a long-term solution. The current state of affairs may not be regarded as ideal by any party, and it certainly does not meet the maximalist aspirations of the KRG, but it has also been an enduring compromise. If the de facto arrangements that have evolved over the past 17 years can be codified, institutionalized, and agreed on they may provide a suitable basis for a lasting solution. The financial and political frameworks are not considered ideal by either side. But the blueprint that has been established grants both Erbil and Baghdad their bottom lines: the preservation and reinforcement of KRG self-rule through lasting fiscal arrangements with the federal government; and, the guarantee of Baghdad’s uncontested sovereign authority over the rest of Iraq, leaving it to negotiate its own decentralization measures with the provinces, unfettered by KRG concerns.
