A bypass around a bombed bridge on Highway 10 was the first construction job Bechtel handed to an Iraqi company in the rebuilding of Iraq after the 2003 invasion: a subcontract, value undisclosed, signed in May 2003 by Al-Bunnia Trading Company, a long-established Iraqi construction firm. Bechtel, out of San Francisco, collected about $2.3 billion for infrastructure rehabilitation. KBR, the Houston engineering giant that was then a Halliburton subsidiary, collected far more. Its Iraq contracts, spanning reconstruction, oil infrastructure and military logistics, totaled $39.5 billion over the following decade. From its first purchase orders, the reconstruction of Iraq was an American commercial enterprise that happened to take place in Mesopotamia.
Stuart Bowen spent nine years documenting what this enterprise produced. As the Special Inspector General for Iraq Reconstruction, he ran an exhaustive public audit of wartime spending: hundreds of audits and project assessments, more than 600 criminal investigations. His verdict, delivered as his final report went to Congress in March 2013: “Not enough was accomplished for the size of the funds expended.”
The verdict is polite, and it misreads the problem. “Not enough was accomplished” implies the goal was accomplishment and the system fell short. But the United States appropriated roughly $60 billion for Iraq’s reconstruction, and that money didn’t disappear into sand. It moved where the system’s design sent it. SIGIR estimated that at least $8 billion was wasted, and the waste, fraud and kickback scandals generated the headlines. The deeper failure lay in what did get built. SIGIR’s inspectors found deficiencies in more than three-quarters of the completed projects they examined, and even the facilities that worked never added up to a functioning economy. The projects were chosen by the wrong criteria and for the wrong beneficiaries, because the reconstruction economy was built around the interests of the reconstructing country.
The question has present-tense stakes. On February 28, 2026, coordinated US-Israeli strikes hit Iranian nuclear facilities, military infrastructure and senior leadership, killing Supreme Leader Ali Khamenei. A Pakistan-brokered ceasefire followed in April, and by late May negotiators had a tentative memorandum of understanding covering the Strait of Hormuz and a 60-day window for nuclear talks, one President Trump never signed off on. Iran suspended talks on June 1, citing Israeli ceasefire violations in Lebanon; a June memorandum brokered with Pakistani and Qatari help collapsed too, and by July the two sides were trading strikes again. As of October 2026, no ceasefire is in force, and indirect talks through mediators continue but have produced no replacement deal. Iran’s infrastructure has sustained massive damage, and who rebuilds it (the US, China, Russia or the Gulf states) is already the subject of geopolitical positioning. The reconstructions since Baghdad offer a fair guide to what comes next.
The anatomy of a reconstruction economy
When the Coalition Provisional Authority began awarding contracts in 2003, it needed no rule barring Iraqi firms. The procurement system for the big US-funded contracts ran on US federal acquisition regulations: proposals submitted in English, American compliance frameworks, and relationships with American contracting officers as the price of entry. An Iraqi construction company with decades of local experience was, for the purposes of this system, illegible. Written for American companies, the system kept Iraqi ones on the margins, mostly as subcontractors to American prime contractors, without anyone deciding to, which made the exclusion structural rather than a correctable policy failure. It sat in the procurement architecture itself and would reappear every time that architecture was deployed.
The contracts that were awarded confirm the design. KBR operated under cost-plus arrangements: reimbursement of allowable costs plus a fee, a structure that does little to reward spending well. Pentagon auditors flagged hundreds of millions in questioned costs under its no-bid oil infrastructure contract. Bunnatine Greenhouse, the Army Corps of Engineers’ top contracting official, told a 2005 hearing held by Senate Democrats that KBR’s arrangements represented “the most blatant and improper contract abuse I have witnessed during the course of my professional career.” She was demoted. Iraqi officials drew the price comparison themselves: “a square meter of concrete should cost 4,000 Iraqi dinar,” Ahmed Chalabi told SIGIR. “The United States paid 16,000.” The Government Accountability Office and SIGIR flagged all of it, and Congress held hearings, yet the contracts continued.
The spending followed the same path as the contract awards. Money moved from the US Treasury to American corporations, through their subcontractors and supply chains, with expatriate staff rotating through on annual deployments. The fraction that entered Iraq’s domestic economy, through Iraqi subcontractors, local hires and locally sourced materials where available, was residual rather than designed. Only from mid-2004 did a push toward direct contracting with Iraqi firms, later formalised as an “Iraqi First” policy, start steering work to local companies, by which time the big contracts had already been signed. The prime contracts, and the profits on them, went to American firms.
The SIGIR archive
The Special Inspector General for Iraq Reconstruction was established in 2004 as an independent oversight body with direct reporting authority to Congress. Over nine years, SIGIR produced hundreds of audits and project assessments, opened more than 600 criminal investigations and secured 90 convictions. Its audits identified about $1.6 billion in potential financial benefits through cost recoveries and renegotiated contracts. SIGIR closed in 2013, leaving behind one of the most detailed public records of wartime reconstruction spending ever assembled.The individual firms operated within a system in which accountability ran in a single direction, toward Washington. SIGIR could audit whether American taxpayer money was spent according to American procurement rules. Whether the spending produced anything recognisable as Iraqi economic recovery was not a question the system was designed to answer.
The fraud cases show the system breaking its own rules; the more important question is what it produced when it followed them. Roughly a third of the $60 billion went to training and equipping Iraq’s army and police. Here is what much of the rest built: power plants that pushed electricity output up, though the 6,000 megawatts the Coalition had promised was not reached on a sustained basis until 2009. Water and sanitation works, of which only 49 of the 136 projects originally planned were slated for completion once money was diverted to security. Schools, hospitals, roads. Each item had a completion date, a capacity figure and a line in a quarterly report, so each could be counted, and countability did more than economic need to decide what got picked.
What the $60 billion failed to build: commercial courts capable of enforcing contracts between strangers; property registries that could establish ownership in a country where records were destroyed or contested; legal frameworks for resolving the commercial disputes that any market economy generates daily; regulatory predictability; and the informal credit of personal guarantees and community lending that had financed small enterprise in pre-war Iraq, and that frayed as social trust broke down and whole communities were displaced. USAID did run small-business lending and economic-governance programmes, and Washington paid for advisers to Iraqi ministries, but these ran to about $4 billion in all, split among agencies with no common strategy, beside a construction programme built from deliverables Congress could count.
Bowen came to see this. SIGIR’s final report distilled the lesson into one line: “Put less emphasis on large infrastructure projects and more focus on smaller ones anchored at the local level.” Officials interviewed for the report singled out smaller water and electricity projects because Iraqis could see that they “put people to work and delivered services,” and the Commander’s Emergency Response Program, a modest fund that let military commanders pay for small, urgent local work, was judged “an effective idea, but only when jobs are kept small and contracts short.” The lesson is an indictment of the larger enterprise. The office that spent nine years auditing a $60 billion programme concluded that its most effective elements were the small ones working outside the programme’s big-contract logic, while Washington, the report added, had measured success “by the amount of money obligated and spent.” The CERP stayed small, about $4 billion of the $60 billion, and the big contracts had long since been signed.
In Iraq and Afghanistan, the countries that deployed military force awarded themselves the reconstruction contracts afterward. Those contracts arrive immediately post-conflict, when local governance is weakest and urgency highest, guaranteeing that procurement flows to external actors with no accountability to the local population and no commercial incentive to develop local capacity. The countries providing the military force are the same countries providing reconstruction funding, and their commercial firms are the same firms collecting the contracts. No law needs to be broken. What the donor’s firms want and what the recipient’s recovery needs pull in different directions, and the big design choices, from procurement rules and accountability frameworks to project selection and timelines, settled that conflict in the donor’s favour.
The timing compounds the structural advantage. Reconstruction money arrives when the recipient country’s leverage is at its lowest: government in ruins, population in crisis, institutions destroyed or displaced. Urgency demands speed. The donor country has capital, contractors ready to deploy, and procurement systems already in place. The contracts are signed in the first months, under emergency authorities, and they lock in who gets paid, who sets the terms and who defines success for the duration. By the time anyone evaluates whether the design is producing recovery, the money is committed and the contractors are entrenched.
But suppose the contracts had gone to Iraqi firms, with every dollar flowing through companies in Baghdad and Basra, managed by Iraqis and employing Iraqis. Iraqi ownership would have changed who got paid, but the projects would still have been chosen for what donors could measure.
What reconstruction doesn’t build
The reconstruction enterprise operates under donor-country reporting requirements. Congress appropriated $60 billion for Iraq. That money carried obligations: measurable outcomes, auditable deliverables, quarterly progress reports. That is reasonable accountability for public funds, and it is also a filter. Projects get funded to the degree they can be measured, reported, and completed within a budget cycle. A power plant has a commissioning date and a megawatt rating. A functioning commercial court does not. Neither does a culture of contract enforcement, a network of trusted commercial intermediaries, or a regulatory environment stable enough for a foreign investor to commit capital beyond a single budget cycle.
Douglass North drew the distinction that matters here. He separated formal institutions (the laws, regulations and property rights that exist on paper) from informal ones: the norms of behaviour, customs of exchange, and relationships of trust that make formal rules operational. A property law means nothing without enforcement, and enforcement means nothing if the population doesn’t believe it will be applied consistently. Reconstruction sees the formal layer of destroyed buildings, missing infrastructure and broken systems, and builds replacements. The informal layer, which makes formal structures productive, is invisible to the procurement system, because trust cannot be written into a contract.
Daron Acemoglu and James Robinson extended the insight. Institutions imposed by external actors without domestic accountability, they argued, tend toward extraction, serving whoever controls them rather than the population living under them. The description fits Iraq’s reconstruction. The big projects were audited by American inspectors, funded by American appropriations and managed by American contractors. Iraqis were the intended beneficiaries; the customer was Congress.
The CPA’s early decisions accelerated the institutional destruction. Orders 1 and 2, issued in May 2003, purged senior Ba’ath Party members from public jobs, removing what SIGIR counted as about 30,000 government employees, and disbanded the Iraqi military, putting some 500,000 men out of work and removing much of the apparatus through which the state had functioned. That apparatus was authoritarian and corrupt. It was also how permits got processed, how property disputes were mediated, how institutional memory was stored. What replaced it was a vacuum, into which the reconstruction enterprise poured concrete while the institutional foundations stayed shattered.
De-Ba’athification did more than create unemployment. It erased the operational knowledge of the Iraqi state: how decisions moved through the system, which local relationships mattered for enforcement, how the gap between written regulation and practical reality was navigated. This knowledge existed in people and in their relationships with each other, not in manuals or organisational charts. Purging the senior ranks of the civil service broke up the web of people who actually made the state work. Reconstruction then built physical infrastructure on top of this institutional void, as though buildings were what Iraq was missing.
SIGIR’s inspectors documented the consequences in detail, and they found a recurring pattern: facilities completed to specification that deteriorated rapidly after handover. Water treatment plants ceased functioning within months because the Iraqi government lacked trained maintenance personnel, spare parts supply chains, and operating budgets. The failures said little about Iraqi capability. Physical assets built without matching investment in the people and systems that keep them running were always likely to fail, and that investment came late and thin: the US did pay for maintenance contracts, plant-worker training and ministry “capacity development”, but in fragments, with shifting priorities, and on a scale dwarfed by the construction budget. Maintenance capacity has no completion date, and a contractor rotating staff through twelve-month deployments cannot supply it.
The trajectory was consistent across sectors. SIGIR’s project assessments documented a recurring arc: construction to specification, handover ceremony, deterioration, abandonment. A primary healthcare centre built for a population of 25,000 would be completed, inspected, transferred to the Iraqi Health Ministry, and within a year lack the staff, supply chains, and operating budget to function as a clinic. The reconstruction enterprise could not close the gap between a physical structure and a functioning institution, because its accounting tracked the structure and its architecture left the institution an afterthought.
Meanwhile, the things Iraq’s economy needed got little attention. Commercial legal frameworks stopped functioning. Property records were destroyed or contested, and it is hard to start a business when you can’t prove you own the building. The informal credit that had financed small enterprise frayed with the displacement of communities and the erosion of social trust. Little of this made a project list, because these were conditions rather than projects, and the reconstruction enterprise was built to deliver projects.
Consider a merchant in Basra in 2005, deciding whether to extend credit to a new supplier. Before the invasion, this transaction rested on a web of informal guarantees — a shared tribal connection, a mutual acquaintance who could vouch for reliability, an understanding that disputes could go to a local figure whose authority both parties recognised. The war and its aftermath wore away all three. Displacement scattered the communities that underwrote reputation. Violence eliminated local arbiters. The formal court system the CPA was building could not yet fill the gap. The rational decision was not to extend credit. Multiply that decision across every commercial transaction in every market in the country, and you have the difference between a reconstructed economy and a functioning one. Small-business lending and microfinance programmes touched the edges of it, but no project could rebuild it, and no quarterly report to Congress could even describe it.
Even if every contract had gone to an Iraqi firm, the project selection criteria (megawatts, buildings, kilometres of road) would have produced the same outcome, because none of the yardsticks measured institutions. An audit framework designed to track physical deliverables cannot measure institutional health. A reporting requirement built for congressional appropriations committees cannot quantify commercial trust. Reconstruction misallocates who gets the money, and it also misidentifies what the money should buy.
The Marshall Plan delusion
The case everyone reaches for is the one where post-war reconstruction worked unambiguously and durably, at scale: Europe between 1948 and 1952. It has been invoked to justify every reconstruction effort since, despite sharing almost nothing with any of them.
Every few years, someone calls for a new Marshall Plan, for Ukraine, for Africa, for climate, for the Middle East. Benn Steil, who wrote a history of the plan, puts it bluntly: “hardly a year goes by” without the invocation. The phrase has detached from any specific policy content and become pure rhetorical gesture: it signals ambition and seriousness and means nothing more.
The analogy persists because it flatters: it tells its users that this has been done before and it worked. It is also wrong in a way that shows what later reconstructions lacked.
The European Recovery Program distributed approximately $13.3 billion, roughly $180 billion in today’s dollars, across 16 Western European countries. But the money wasn’t what made it work. The recipients were not shattered states. They were countries with intact legal systems, experienced bureaucracies, educated workforces, established commercial traditions, and recent memory of operating modern industrial economies. Workers knew how to run the factories, bureaucracies knew how to process trade permits, and courts knew how to adjudicate commercial disputes. The Marshall Plan’s job was to restart this machinery.
J. Bradford DeLong and Barry Eichengreen, in an influential economic analysis of the programme, found that the aid itself “was not large enough to have significantly accelerated recovery by financing investment” or by rebuilding damaged infrastructure. What it did was push European policy toward markets and stabilisation. The Marshall Plan provided capital and coordination to economies that already had the institutional machinery to deploy capital productively. Political scientist Eva Bellin, speaking at a Harvard panel in 2004, stripped the mystique: post-war Germany and Japan were “a firm whose building has burned down” — the organisational knowledge, the trained workforce, the management systems were intact. Iraq was “like a firm that is putting a business together for the first time.”
What the Marshall Plan built
The European Recovery Program was not primarily a construction programme. Its central mechanism was the counterpart fund: recipient governments deposited local currency equivalents of American aid into special accounts, spendable only with US approval. This created leverage for structural reform (trade liberalisation, monetary stabilisation, reduced state controls) without direct American management of domestic economies. The OEEC, forerunner to today's OECD, was created specifically to coordinate implementation, embedding inter-European economic cooperation into the aid architecture. The Marshall Plan worked as a reform and coordination instrument that also included capital transfers.The comparison, applied to Iraq or Afghanistan or Bosnia, inverts the problem. It frames reconstruction as a capital shortage — buildings gone, money needed. On that view, enough money and enough new buildings produce recovery. This framing conceals the actual constraint, which is institutional. And concealment serves the interests of the concealer: if reconstruction is a capital problem, the answer is contracts. If it’s an institutional problem, the answer is something no contractor can deliver and no appropriations committee can evaluate on a fiscal-year timeline. The analogy makes the problem solvable on terms that benefit the actors tasked with solving it.
That is why the comparison survives despite being so wrong. It converts an institutional challenge into a capital challenge, so that those who finance the repair can also profit from it.
Afghanistan proved the point at full scale. The United States appropriated approximately $148 billion for Afghan reconstruction over two decades and had disbursed about $137 billion of it by mid-2025, a sum on the scale of the entire Marshall Plan for Western Europe. SIGAR, the inspector general for the effort, found that $26 to $29 billion was lost to waste, fraud, and abuse. Beyond that loss, twenty years of spending could not produce institutions capable of surviving the withdrawal. As American forces withdrew in 2021, the state apparatus collapsed in weeks, the army it had paid for included. The money had bought buildings and an army, and the institutions that might have outlasted the withdrawal had never been built.
If the Marshall Plan predicts recovery and the actual architecture of reconstruction predicts dependency, the question becomes empirical: what a “completed” reconstruction looks like twenty years on. Bosnia and Kosovo supply that test.
The completed reconstructions
The objection to the Iraq case writes itself: Iraq was uniquely catastrophic, violent, sectarian and vast. Grant that, and look at two cases where conditions were more favourable: smaller interventions, stronger coordination, European countries with institutional heritage. If the pattern holds there, circumstance alone makes a weak explanation.
Bosnia first. The Dayton Agreement ended the war in 1995 and opened the international aid taps. Approximately $5.1 billion in reconstruction money flowed in under a World Bank and European Commission priority reconstruction programme. The early economic growth came from the aid inflows themselves, not from domestic capacity, and it masked underlying structural weaknesses without resolving them. The trajectory since: official development assistance dropped from roughly 60% of gross national income in 1995 to about 1% by 2023. As aid fell away, remittances took its place, and productive capacity did not.
Personal remittances ran at approximately 10.2% of GDP in 2023, more than ten times the global average of under 1%. Manufacturing contributes roughly 13% of GDP, concentrated in low-value-added sectors: raw materials, basic metals, wood products. The country runs a structural goods-trade deficit of $6–7 billion a year. Foreign direct investment hovers around 3–4% of GDP despite three decades of theoretical stability. Capital doesn’t flow to economies where productive capacity is weak, and productive capacity doesn’t develop where institutions can’t support it.
The population has fallen by roughly a quarter since 2000, to about 3.2 million. In 2021, nearly half of Bosnia’s young people surveyed said they were considering emigration. Tens of thousands leave each year, disproportionately the educated and skilled, who are the people an economy needs most to grow on its own.
Thirty years after Dayton, reconstruction’s visible outputs are in place: the roads, the buildings, the power grid. Underneath sits an economy that never developed the internal capacity to sustain itself, and that keeps losing its most productive citizens to countries whose economies work.
Kosovo tells the same story more sharply. Official unemployment fell from 57% in 2001, a figure inflated by counting people whose only job search was registering at an employment office, to 10.8% in 2024 — a headline that suggests progress until you check what underwrites it. Remittances constitute roughly 17.3% of GDP, and, as the US State Department summarises the Central Bank of Kosovo’s findings, they are “mainly used for personal consumption, not for investment purposes.”
The mechanism is self-reinforcing. Remittances sustain consumption without requiring domestic production to meet it — imports fill the gap, widening the trade deficit. Employers compete for workers against the option of emigrating to higher-wage economies but cannot raise wages because domestic productivity is too low to support them. The most ambitious leave. Those who stay depend on money earned by those who left. The economy functions, after a fashion, on productivity generated abroad.
The international presence fed the same imbalance. The money that arrived with the UN mission and the aid agencies, the political economists Nicolas Lemay-Hébert and Syed Mansoob Murshed argue, crowded out domestic productivity and fostered rent-seeking over enterprise. The reconstruction built the grid and the roads but not an economy that generates enough wealth to keep its own population.
The pattern is specific enough to be predictive. Reconstruction succeeds on its own terms: infrastructure gets built, aid phases out, headline indicators improve. Underneath those indicators, the economy stays tethered to external money, first aid and then remittances. Productive capacity remains weak, and the young emigrate. The institutional conditions for self-sustaining growth never fully materialise. In Bosnia, donors did invest in them, helping set up a central bank, a customs service and banking supervisors, but that work ran beside a programme organised around physical assets that donors could see in reports, audits and progress photographs, and the deeper reforms stalled in the country’s political gridlock.
Local politics carries part of the blame. But the outcome also fits a model that counts deliverables and defines success as completion, and neither measure asks whether a country can sustain itself. Bosnia and Kosovo had every advantage Iraq lacked: smaller scope, less violence, proximity to the EU, stronger coordination. They still ended up dependent.
The next case is taking shape now, and the structural features that determined outcomes in Baghdad, Sarajevo, and Pristina are already visible in it.
The next reconstruction
The memorandum negotiated through Pakistani mediators in late May would have reopened the Strait of Hormuz, lifted the US naval blockade and opened a 60-day window for talks on Iran’s nuclear programme, but President Trump never signed it. When Iran suspended negotiations on June 1, Foreign Minister Araghchi declared that the ceasefire “is unequivocally a ceasefire on all fronts, including in Lebanon. Its violation on one front is a violation of the ceasefire on all fronts.” By late summer Tehran still held the Strait of Hormuz while Pakistani and Qatari mediators tried to coax both sides back to the table.
As of October 2026, the June framework lies in pieces, the two sides were trading strikes again by July, and indirect talks through mediators have yet to replace it. The reconstruction question is already being asked anyway. Iran’s nuclear programme has been badly damaged. Military installations lie in rubble. Civilian infrastructure sustained collateral damage across multiple provinces. Somebody will pay to rebuild this; who it will be, and on what terms, has not been settled.
The reconstruction contestants
Four actors have stakes in who rebuilds Iran. China signed a 25-year comprehensive strategic partnership with Iran in 2021, reportedly pledging up to $400 billion in investment, and on paper looks like the most likely lead, though little of that money has materialised. But in 2025 China’s trade with Saudi Arabia and with the UAE each ran at about $108 billion, against roughly $41 billion with Iran even counting unreported oil purchases, which puts its reconstruction ambitions in tension with its Gulf commercial relationships. Russia benefits from the elevated oil prices regional instability produces but is resource-constrained by the Ukraine war. The Gulf states are wary: the UAE, among the countries hit hardest by Iranian retaliation, has called that aggression a decisive turning point that triggered a long-term crisis of confidence. A loose bloc of Egypt, Pakistan, Saudi Arabia, and Türkiye, which the International Institute for Strategic Studies calls a “new Middle Eastern quadrilateral,” is taking shape. And President Trump has tied any Iran deal to more countries (Saudi Arabia, Qatar, and Pakistan among them) joining the Abraham Accords, a demand that subordinates Iranian reconstruction to a separate American geopolitical project entirely.Expect the structural features to reproduce. Iran is already patching war damage on its own, starting with tens of thousands of homes in Tehran, but Iranian state media put the cost of a full rebuild at about $270 billion, and work on that scale will almost certainly draw in outside money and outside firms.
Iran’s institutional capacity, weakened by decades of sanctions and now by the destruction of its senior leadership and key facilities, is unlikely to finance a rebuild at this scale on its own. What remains open is which external actors will pay, and how much of the work Iranian firms get to keep.
And whichever ones prevail will bring their own commercial interests and accountability frameworks, and their own definition of what “rebuilt” means. Chinese-led reconstruction follows Chinese procurement systems, employs Chinese firms, and serves Chinese strategic priorities — energy corridors, Belt and Road infrastructure, port facilities. American-conditioned reconstruction follows the procurement logic documented in Iraq. The financing power’s commercial interests will shape what gets built, as they did in Iraq.
Consider the most likely scenario. China’s strategic interests in Iran centre on energy security and Belt and Road connectivity — access to Iranian oil and gas, and a corridor linking China to the Mediterranean through Iranian territory. Chinese reconstruction would prioritise energy infrastructure, port facilities, rail connections, and the large-scale physical projects that China’s state-owned construction firms specialise in delivering. Chinese managers and engineers would fill the senior technical positions. Procurement would run through Chinese commercial channels. The pattern is documented across Chinese enterprises in Africa: local workers make up the great majority of the workforce, but their share falls sharply among top managers and engineers.
An American-conditioned scenario would look different in its particulars and identical in its structure. American reconstruction would prioritise the sectors that serve American strategic interests: nuclear containment, security architecture and regional energy markets. It would also run through procurement systems whose logic was documented in Iraq a generation ago.
The projects selected will be those the financing power can report as completed: visible infrastructure, countable outputs, the Iranian equivalents of Iraq’s power plants. The institutional work Iran requires will get at most a sideline: governance structures for a post-Khamenei political order, commercial legal frameworks capable of attracting investment, regulatory capacity, and the social cohesion that decades of authoritarian rule and sanctions and now military devastation have eroded. None of that counts as a project, so little of it will make the project lists.
And the Marshall Plan analogy will surface. Someone will propose a “Marshall Plan for Iran,” invoking the one case where reconstruction worked to justify a design that reproduces every case where it didn’t. The framing will convert an institutional crisis into a contracting opportunity, obscuring that Iran’s binding constraint is governance capacity, not rubble. The analogy will be accepted because it flatters the actors who stand to profit from it, just as it was accepted for Iraq, for Afghanistan, and for every reconstruction that followed the same design to the same result.
The historical record generates predictions specific enough to test. If Iranian reconstruction follows the documented pattern, and nothing in current positioning suggests a departure, it will prioritise large visible infrastructure over institutional rebuilding; contracts will flow to non-Iranian firms under accountability structures designed in Beijing or Washington, not Tehran; physical assets will rise and deteriorate for want of the maintenance capacity reconstruction never invests in; and the economic activity generated will flow primarily to the reconstructing entities, not the Iranian population. If Bosnia and Kosovo represent the long-term trajectory, the result will be an economy dependent on external financial flows rather than domestic productive capacity.
Iran has one advantage Iraq never did. Its institutional base, from an educated population to bureaucratic capacity and industrial know-how, survived the strikes in ways Iraq’s institutions did not survive the occupation. If reconstruction were designed to support that base, the prognosis would be better than Iraq’s. Iran has more of the Marshall Plan preconditions than Iraq ever did.
But that capacity matters only if the reconstruction design engages it — if contracts require Iranian firms, if project management develops Iranian capacity, if accountability runs to Iranian institutions rather than to the financing power’s audit apparatus. None of the four actors with a stake in the work has shown any sign of wanting to design it this way. China wants energy corridors and the US wants nuclear compliance; Russia wants elevated oil prices, and the Gulf states a weakened rival. Each objective can be served by the standard reconstruction model. None requires Iranian institutional recovery.
Bowen’s verdict, “Not enough was accomplished for the size of the funds expended,” has become the standard epitaph for reconstruction. It turns up in retrospectives, lessons-learned reports and op-eds calling for a smarter approach next time. The sentence assumes that accomplishment was the point.
The reconstruction economy has its own beneficiaries and its own metrics. Measured by contracts awarded, projects completed, audits passed and money disbursed, the enterprise performs as designed, and for the firms that collected the contracts it was no failure.
Reconstruction in Iran will happen; there is too much money in it. The best predictor of whose economy the spending is designed to build, better than donor intentions, committed amounts or the next Marshall Plan invocation, is the contract structure: who gets the work, who defines what “done” looks like, and who the completed projects answer to.
That information will be knowable before the first contract is signed, and much of it is visible already.
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Key Sources and References
Special Inspector General for Iraq Reconstruction, “Learning from Iraq: A Final Report from the Special Inspector General for Iraq Reconstruction,” March 2013. https://www.globalsecurity.org/military/library/report/2013/sigir-learning-from-iraq.pdf
Special Inspector General for Iraq Reconstruction, “Final Listing of Audit and Other Reports Issued by SIGIR on Reconstruction Spending in Iraq,” Federal Register notice, September 24, 2013. https://www.federalregister.gov/d/2013-22971
Curt Tarnoff, “Iraq: Reconstruction Assistance,” Congressional Research Service, RL31833, April 2007. https://www.everycrsreport.com/reports/RL31833.html
Special Inspector General for Iraq Reconstruction, “Hard Lessons: The Iraq Reconstruction Experience,” 2009. https://archive.org/details/HardLessonsTheIraqReconstructionExperience
“Iraq reconstruction: Too much US money, too few results,” Associated Press via MPR News, March 6, 2013. https://www.mprnews.org/story/2013/03/06/iraq-reconstruction-too-much-us-money-too-few-results
“Iraq Reconstruction Program Needs Its Own Rebuild” (interview with Stuart Bowen), NPR, 2009. https://www.npr.org/transcripts/114351038
Bechtel, “Bechtel Signs First Iraq Firm to Construction Subcontract,” press release, May 2003; “Bechtel says first land subcontract in Iraq signed,” ENR, 2003. https://www.bechtel.com/press-releases/bechtel-signs-first-iraq-firm-to-construction-subcontract/ · https://enr.com/articles/30385-bechtel-says-first-land-subcontract-in-iraq-signed
Bechtel, “USAID Awards Bechtel National Iraq Infrastructure II Contract,” press release. https://www.bechtel.com/press-releases/usaid-awards-bechtel-national-iraq-infrastructure-ii-contract/
“IRAQ: Bechtel ends Iraq rebuilding after a rough 3 years,” CorpWatch. https://www.corpwatch.org/article/iraq-bechtel-ends-iraq-rebuilding-after-rough-3-years
“And The Winner For The Most Iraq War Contracts Is… KBR, With $39.5 Billion In A Decade,” International Business Times, March 2013. https://www.ibtimes.com/winner-most-iraq-war-contracts-kbr-395-billion-decade-1135905
“Halliburton contracts balloon,” Center for Public Integrity / International Consortium of Investigative Journalists. https://publicintegrity.org/national-security/halliburton-contracts-balloon/
Bunnatine Greenhouse testimony before the Senate Democratic Policy Committee, June 27, 2005, as reported in “Army whistle-blower blasts Halliburton deals,” Reuters via NBC News, June 2005. https://www.nbcnews.com/id/wbna8381220
“Audit Faults U.S. Infrastructure Efforts In Iraq,” Radio Free Europe/Radio Liberty, January 27, 2006. https://www.rferl.org/a/1065164.html
US Government Accountability Office, “Stabilizing and Rebuilding Iraq: U.S. Ministry Capacity Development Efforts Need an Overall Integrated Strategy to Guide Efforts and Manage Risk,” GAO-08-117, October 2007. https://www.gao.gov/products/gao-08-117
US Government Accountability Office, “Rebuilding Iraq: Integrated Strategic Plan Needed to Help Restore Iraq’s Oil and Electricity Sectors,” GAO-07-677, May 2007. https://www.gao.gov/products/gao-07-677
Douglass North, Institutions, Institutional Change and Economic Performance, Cambridge University Press, 1990. https://www.cambridge.org/core/books/institutions-institutional-change-and-economic-performance/AAE1E27DF8996E24C5DD07EB79BBA7EE
Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Crown, 2012. https://www.penguinrandomhouse.com/books/205014/why-nations-fail-by-daron-acemoglu-and-james-a-robinson/
Coalition Provisional Authority Order Number 1, “De-Ba’athification of Iraqi Society,” May 16, 2003; Coalition Provisional Authority Order Number 2, “Dissolution of Entities,” May 23, 2003.
Benn Steil, “Why It Is So Hard to Repeat the Marshall Plan,” German Marshall Fund, June 6, 2022. https://www.gmfus.org/news/why-it-so-hard-repeat-marshall-plan
US Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (series CUUR0000SA0). https://data.bls.gov/timeseries/CUUR0000SA0
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