ارزیابی سیاست صلح در عراق: شواهدی از بازار های مالی عراق

At the end of January, 2006 the Iraqi government issued roughly $2.7 billion of debt in exchange for over $20 billion of Saddam-era commercial claims. This paper uses variation in the yield spread of this sovereign debt to evaluate pacification policy in Iraq. Structural change models are run in conjunction with conventional event study analysis. Results detail a mixed market reaction towards pacification policies implemented through August, 2006. While the market seems wary of coalition troop withdrawals, events denoted military and political breakthroughs by the United States seldom coincide with decreases in the yield spread. However, the market responds to news of negotiations with Iran positively. The analysis underscores the potential benefits of using market variation to inform policy in regions where data collection is difficult and policies are time sensitive. Journal of Comparative Economics36 (1) (2008) 1–16.

On January 23, 2006 Iraqi sovereign debt began trading on world markets. Variation in this bond's yield spread provides an additional vehicle to inform policy in Iraq. This market-based metric is particularly informative in situations where conventional data collection is difficult or impossible. Since efficient markets aggregate available information rapidly, market analysis has the potential to provide unbiased policy analysis within a short time frame. In addition to rapidly and efficiently processing information, markets provide incentives to reveal private information. If investors have access to information not available to policy makers, market variation contains an additional source of intelligence. Despite the potential benefits to policy makers in Iraq and in other distressed environments, economists have rarely used event studies to analyze non-economic events and policies. Prominent exceptions include Willard et al. (1996) and Frey and Kucher (2000) who use market variation to identify structural breaks in the American Civil War and World War II. While pioneering in their use of markets to determine important political and historical events, these studies were not intended to provide policy evaluations. Recently, economists have shown increased interest in using markets to provide “real-time” policy evaluations. Leigh et al. (2003) use international financial markets to forecast the outcome of the coalition invasion of Iraq. Zussman and Zussman (2006) use Israeli and Palestinian stock market data to investigate the effectiveness of ongoing anti-terrorism measures in Israel. This paper examines the Iraqi bond market's reaction to political and military events from January through August, 2006. Events are then used to evaluate three pacification strategies considered by policy makers during this period of increasing violence. The first of these strategies was aimed at encouraging political reconciliation between Iraqis, the second called for engaging Iran and the third suggested increased military action against insurgents and militias. The paper highlights the potential benefits of using financial markets to inform policy in areas where conventional data collection is problematic and where policies are time sensitive. I use a list of country-specific headlines provided by Bloomberg to run conventional event study analysis on the Iraqi bond market. I combine these results with those provided by structural change models to provide a robustness check. The use of both techniques arguably provides an unbiased analysis of market variation. In broad terms, the analysis shows that events labeled by United States officials as military and political breakthroughs seldom coincided with significant decreases in the yield spread. I find evidence that the market viewed sectarian violence (i.e. violence directed at a specific religious or ethnic group) as more worrisome than random acts of insurgent violence. The market responded favorably to news of political reconciliation among the involved parties (including Iran), yet remained flat following the killing of al-Zarqawi and other insurgents. In sum, results suggest that the market viewed political reconciliation between Iraqi parties and negotiations with Iran as the most promising avenues to low-risk Iraqi debt during the period analyzed. The paper proceeds as follows: Section 2 provides an overview of the Iraqi financial markets used in the analysis. Section 3 provides a broad overview of coalition pacification policies in Iraq and argues for the use of markets to help inform policy. Section 4 details the empirical strategy and the results. Section 5 uses the results to investigate policy implications. Section 6 concludes.

Markets can be used to inform policy makers where conventional policy analysis is impossible. While some level of interpretation of market evidence is always required, multiple econometric techniques allow the researcher to weigh competing interpretations of market variation. Robust results can then be used to provide policy makers with the market's reaction to events and policies of interest. The Iraqi bond market appears to have often differed with prominent policy makers in its interpretation of events in Iraq. While many officials in Washington initially downplayed the dangers of sectarian violence, the Iraqi bond market suffered significant declines after incidents of such violence. The day US officials hailed the inauguration of the Maliki government as a “watershed,” investors declared Iraqi bonds more risky. Finally, the Iraqi bond market was flat following the killing of al-Zarqawi despite claims that his death marked a turning point. Variation in the Iraqi bond market at other times supported the statements of high-ranking military and political leaders. The market seems to concur with policy makers that Iran is involved in Iraq and that troop withdrawals will make Iraq more risky. Analysis also suggests investors believe there is a non-trivial chance the Iraqi government will fulfill its financial obligations for the life of the bonds. Indeed, news of reconciliation among political parties was often greeted by a decline in the yield spread. On the whole, events denoting political reconciliation between Iraqis and those detailing impending negotiations with Iran were most strongly associated with a decline in the yield spread during the period analyzed. Political reconciliation, however, appears to have stagnated following the appointment of the current Maliki government. Although the market seems to believe that Iranian cooperation would help improve the situation in Iraq, a US–Iranian agreement on Iraq seems remote. Market variation during the first half of 2006 provides little indication that the yield spread on Iraqi bonds will decrease in the future in the absence of Iraqi political reconciliation or an agreement with Iran. If the market is correct in its assessments and the Iraqi political process remains gridlocked, then increased diplomacy with Iran appears the most promising pacification policy. In the absence of Iranian cooperation and Iraqi political reconciliation, market variation provides little hope that the continued presence of coalition military forces will alone solve Iraq's problems.