An Economic Analysis of the Financial Records of al-Qa'ida in Iraq

An Economic Analysis of the Financial Records of al-Qa'ida in Iraq

An Economic Analysis of the Financial Records of al-Qa'ida in Iraq

An Economic Analysis of the Financial Records of al-Qa'ida in Iraq

Synopsis

This monograph analyzes the finances of the militant group al-Qa'ida in Iraq in Anbar province during 2005 and 2006, at the peak of the group's power and influence. The authors draw on captured financial documents that give details on the daily financial transactions of one specific sector within Anbar province and of the financial transactions of the AQI provincial administration.

Excerpt

This monograph conducts a series of economic analyses on two collections of documents detailing the administration of al-Qa‘ida in Iraq (AQI) during 2005 and 2006 in Anbar province, Iraq. The documents contain information on the group’s finances, payrolls, and organization.

The records show that AQI was a bureaucratic, hierarchical organization that exercised tight financial control over its largely criminally derived revenue streams. Using attack reports and AQI’s spending data, we find that attacks statistically increased at a rate of one per every $2,700 sent by the provincial administration to a sector group within the province, suggesting that AQI paid not only for materiel but also for important expenses related to organizational sustainment, such as compensation and rents. AQI members were paid less and simultaneously faced a much greater risk of death than the general Anbar population, which suggests that financial rewards were not a primary reason for joining the group. Our findings imply that financial interdiction is one useful tool for slowing and disrupting militant attacks, but that neither interdiction nor material demobilization incentives on their own will be effective in ending a militant group.

This research was conducted within the Intelligence Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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