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> By CNN's Liz George > Wednesday, December 10, 2003 Posted: 1015 GMT ( 6:15 PM HKT) > > LONDON, England (CNN) -- Analysts have said it could cost > anything from $84 billion to nearly $500 billion to rebuild > Iraq, a country battered by two wars in two decades and 12 > years of United Nations sanctions. Dear list members, A methodological remark on the above: estimates of the cost of 'rebuilding' Iraq are meaningless. Rebuilding implies returning Iraq to some previous state, which makes no sense in developmental terms. The analogy that I often use is lower Manhattan after 11 September: no one is proposing that the twin towers be rebuilt; the area will continue to develop, that will entail costs, but there is no terminal state: development does not stop. A second observation is that many of these 'rebuilding' costs are actually just prices of shopping lists. One of the basic lessons of recent economic history is that incentive structures matter: Soviet-bloc planners largely failed to harness these as well as capitalist economies did. Prices of shopping lists seem to echo the Soviet approach. My own sense is that the more important 'costs' are those of getting incentives right: expensive equipment can be installed throughout Iraq but unless people have the incentive to maintain it, use it properly, not blow it up or strip it, then the money spent is a meaningless measure of Iraqi economic development. Best, Colin Rowat work | Room 406, Department of Economics | The University of Birmingham | Birmingham, B15 2TT, UK | web.bham.ac.uk/c.rowat | ( 44/0) 121 414 3754 | (+44/0) 121 414 7377 (fax) | c.rowat@bham.ac.uk personal | (+44/0) 7768 056 984 (mobile) | (+44/0) 7092 378 517 (fax) | (707) 221 3672 (US fax) | c.rowat@espero.org.uk _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email casi-discuss-admin@lists.casi.org.uk All postings are archived on CASI's website: http://www.casi.org.uk