Content area
Abstract
This study is a statistical analysis on the theoretical foundations of the identification of development strategies of Iraq for the 1951-1980 period.
Two approaches of isolating development strategies--the investment allocation and the structural change--were developed and compared statistically.
The allocation approach shows the actual investments in major economic sectors under the various development plans. The conclusion, derived by this approach, is that the first two development plan strategies (1951-1958) were primary oriented, i.e., their essential feature was to develop the agricultural sector. In contrast, the third development plan (1959-1962) was social overhead capital oriented, because it allocated a high proportion of the total investment funds to expand the basic infrastructure of the economy. The remaining three development plans (1965-1980) were shown to be industrial oriented.
To test the best orientation of these development strategies, the "canonical correlation" was used, and it turns out that the best strategy would have been to develop agriculture, the distribution system, the services, the mining and then the manufacturing sector.
Since this approach was essentially related to development planning, the planning mechanism was described and critically analyzed. It was concluded that development planning was poorly performed, and was an obstacle to economic development of Iraq, because it was a grossly imperfect substitute to the market mechanism, and not complementary as it should be.
With respect to the structural change approach, the basic propositions of structural changes in terms of output, international trade, employment, and income use were tested statistically. It is found that the economy witnessed structural change in all these aspects except exports because it continued to depend upon the export of one primary product, oil.
The structural changes were estimated by constructing a complex econometric model to investigate the orientations of the various development plan strategies. The finding is that all development plan strategies were primary oriented.
The results obtained from using these approaches were analyzed and attributed to three basic problems embodied in the backwardness of the industrial sector; poor performance of the related sectors, and to the inequitable distribution of income.
