Arguably, the United States exists today mired in duality between a cultural and economic imperialistic strategy and a strong grasp of liberal democratic values. US concern over both postwar economic and security conditions resulted in an aggressive push toward open and free economic trade – particularly with Europe. The idea of a European Common Market was proposed and pushed by the United States to ensure open access to export venues, foreign investment, and labor markets, which by its nature may be considered imperialistic. Additionally, the establishment of military bases worldwide has not been to colonize, but to ensure that stability and access are maintained for the pursuit of US interests. These factors resulted in a condition that coupled inherently dualistic US tendencies with European concerns over collective security, abandonment, and economic recovery. They also led to the establishment of international institutions like NATO and the WTO. Ikenberry identifies that, “over time, postwar settlements have moved in the direction of an institutionalized order, and have begun to take on some constitutional characteristics. Power is exercised—at least to some extent—through agreed-upon institutional rules and practices, thereby limiting the capacities of states to exercise power in arbitrary and indiscriminate ways or use their power advantages to gain a permanent advantage over weaker states."

Through institutions, argues Ikenberry, the United States is able to continually pursue both a multilateral system of free trade and an open and pluralistic Western order. One of Ikenberry’s most profound assertions is that to achieve long-term stability, the United States has had to engage in restraint while pursuing its strategic goals, thereby lowering the uncertainty of outcome that might have pushed its new allies away. It has also had to entice the participation of secondary states in an open and transparent system of government that would allow European and Asian partners to influence the goals and objectives of international policies.

In its entirety, Ikenberry’s work effectively describes the evolution of the institutional model as a process of postwar resolution and order-building. The next logical step, having extracted the general principles and processes of institutionalism, is to apply the institutional model to the current crisis in Iraq and the greater Middle East. In this model, several significant applications exist by which peace and stability may come as a lower price to US foreign policy. The application of sound principles to resolve the Iraqi postwar order has never been more critical than it is today.

Iraq: Modern Applications of the Institutional Model

The postwar problems in Iraq concisely represent an immediate and useful application of the institutional model. While the effective sphere of influence is large and has many secondary players, the war-fighting has been within only one state’s borders. Due to the limited number of primary players, therefore, this is a fairly simplistic instance to which the institutional model may be applied. The ability to tie Iraq to institutional commitments will likely have a much broader effect on the greater Middle East in years to come – regardless of whether or not democracy in its Western form takes root there within the next decade. The use of institutions as a stabilizing force will likely have greater long-term effect, so there must be continued patience and vigilance while the effects take their course. Comparing the principles drawn from historical applications of the institutional theory and applying them to current issues in the Iraq dilemma may lead to a number of positive conclusions.

Iraq’s current post-conflict instability presents three distinct challenges to which the institutional model must be applied to create transformation: power and state-character asymmetries exist with respect to ethnic and religious values, and the relative position of natural resources within both Iraq and the surrounding nations that are a threat to the establishment of long-term peace and order; alignment with the long-term national security interests of the United States, as joint institutional commitments in both regional economic growth and mutual security commitment will likely relieve the fears of abandonment or domination by the United States that exist in Iraq and other Middle Eastern states; and the political and social fabric of Iraq (and its neighbors) requires transformation to democratic values while retaining its Islamic roots, which can best be achieved through the formation of institutions that focus on the development of modern free-market economies. In 2005, the National Security Council published the “National Strategy for Victory in Iraq.” This document provides the framework for what the Bush administration perceives as conditions for the “win.” Cross-referencing this document with the goals and conditions previously mentioned indicates that an already significant alignment exists. This alignment should apply the use of institutions as a force for asymmetric stability, regional security, and economic growth through mutual commitment and restraint, as well as the spread of democratic values.

Challenges and Opportunities: Economics

The power imbalance that exists in the Middle East is not based merely on military might but rather on a combination of economic output, military resources, and collateral treaties. In the realm of economic output, petroleum production, which is vital to the Iraqi economy, offers a useful starting place to apply the institutional model for transformation. As a percentage of GDP of the Gulf States (including Iraq), petroleum remains the top income producer. The protection of petroleum reserves remains at the top of national security interests of most global industrialized nations, thereby creating a continued platform for cooperation. It is the local distribution of these resources among ethnic and religious regions – particularly in postwar Iraq – that is troubling. The largest oil fields are within the self-proclaimed borders of the Kurdish region of Northern and Eastern Iraq and the area’s continued push for regional autonomy is a source of tremendous internal conflict within Iraq. Sunni and Shia ethnic groups, vying for political control of postwar Iraq, are pushing for a larger stake in the control of economic resources. A power-sharing solution (collective ownership of the oil reserves and refineries) should be established by creating a joint intrastate economic institution similar to the Gulf Cooperation Council (GCC). Stated objectives of this body could then include joint regulation formulation, joint capital and labor application, and joint administration of natural resources like petroleum. Collaborative economic growth may help drastically stabilize the internal ethnic and religious tensions that exist in Iraq.