This report leverages remote sensing data and satellite imagery to assess the impact that Islamic State control and governance have on local economies in Iraq and Syria. It paints a bleak picture of life under the Islamic State. Although the group was able to maintain stable conditions in parts of Mosul and Raqqah, conditions in other cities deteriorated under poor governance and an inability to hold territory in the face of military opposition.

When the Islamic State Comes to Town

The Economic Impact of Islamic State Governance in Iraq and Syria

Eric Robinson, Daniel Egel, Patrick B. Johnston, Sean Mann, Alexander D. Rothenberg, David Stebbins

ResearchPublished Sep 13, 2017

Cover: When the Islamic State Comes to Town
Download PDF
Additional Downloads

Includes Translations; other ebook formats

Order a print copy

At its peak, the Islamic State of Iraq and the Levant (ISIL) controlled vast portions of territory in Iraq and Syria with several million inhabitants. ISIL's territorial ambition and desire to conduct state-like governance over this territory are integral to its global ideological appeal. By examining ISIL's impact on local economic activity in Iraq and Syria, this report seeks to assess the effectiveness of ISIL's governance over its self-styled caliphate.

This report leverages remote sensing data and commercial satellite imagery to offer a unique, data-driven look inside areas controlled by the Islamic State. It paints a bleak picture of economic life under ISIL, replete with shortages of electricity, massive refugee flows, reductions in agricultural output, and upticks in violence all associated with ISIL control.

At times, ISIL was able to build a dense governing apparatus that helped maintain stable local commercial activity, particularly in its strategic capitals in Raqqah and Mosul. At other times, ISIL mismanaged key resources or sought to punish its citizenry rather than govern it. However, this report suggests that decaying economic conditions in ISIL-held territory are also a product of ISIL's inability to insulate its territory from opposing military forces. Outside pressure against ISIL successfully prevented the group from realizing its governing ambitions across significant parts of its caliphate, with major consequences for its ability to support functioning local economies.

This report is important for those trying to understand the group's impact on local populations in Iraq and Syria, for those seeking to counter its financing or conduct post-conflict stabilization, and for broader efforts to understand the economic impact of insurgent governance.

Key Findings

Military Pressure on ISIL-Held Areas Has Dampened Economic Activity and Prevented ISIL from Fully Governing According to Its Stated Goals

  • This pressure has contributed to significant economic decay in ISIL-held territory and limits ISIL's ability to profit from taxation and gain popular legitimacy.

ISIL's Strict Governance Is Not Necessarily Self-Defeating

  • Local economies that struggled under ISIL control did so not because taxes were too high or social regulations too restrictive. The struggles largely coincided with military efforts to disrupt ISIL control.

ISIL Showed Signs of Successful Stewardship over Local Economies but Also Signs of Incompetence and Indifference

  • In multiple cities, ISIL prioritized electricity provision to hospitals and key infrastructure even in the face of larger electricity shortages.

Electricity Consumption Has Suffered the Most of All Economic Activity Under ISIL Control

  • Electricity consumption in ISIL-held areas showed the most-significant declines from pre-ISIL levels of activity.
  • After liberation, these effects linger.

Flows of Internally Displaced Persons Begin Well Prior to Liberation

  • Planning for liberation of ISIL-held cities must take into account the fact that these flows begin well before the first military forces enter an ISIL-held city.

Markets Do Not Return to Normal Activity Immediately After a City Is Liberated

  • Markets are partially damaged by fighting during ISIL's retreat and appear largely empty following liberation because residents fled the fighting.

Bureaucratic Capacity Likely Remains in Areas Liberated from ISIL

  • Liberating forces are likely to encounter local doctors, engineers, and bureaucrats who either voluntarily worked for ISIL or were co-opted into doing so.

Recommendations

  • Given that ISIL's strict governance is not necessarily self-defeating, military efforts to retake its remaining territory and prevent a resurgence of the group remain critically important.
  • Stabilization planning for the liberation of areas still controlled by ISIL should focus on procuring power supplies and rebuilding energy infrastructure. Implementers should be prepared to provide this assistance well beyond the first few months after liberation.
  • Planning for humanitarian assistance surrounding liberation must take into account the location and unique needs of internally displaced persons.
  • Stabilization planning should focus on working with liberating forces to effectively and fairly distinguish between ISIL sympathizers and unsympathetic locals with the needed institutional knowledge to help provide public services after cities are liberated.

Order a Print Copy

Format
Paperback
Page count
260 pages
List Price
$64.00
Buy link
Add to Cart

Topics

Document Details

  • Copyright: RAND Corporation
  • Availability: Available
  • Year: 2017
  • Print Format: Paperback
  • Paperback Pages: 260
  • Paperback Price: $64.00
  • Paperback ISBN/EAN: 978-0-8330-9855-9
  • DOI: https://doi.org/10.7249/RR1970
  • Document Number: RR-1970-RC

Citation

RAND Style Manual
Robinson, Eric, Daniel Egel, Patrick B. Johnston, Sean Mann, Alexander D. Rothenberg, and David Stebbins, When the Islamic State Comes to Town: The Economic Impact of Islamic State Governance in Iraq and Syria, RAND Corporation, RR-1970-RC, 2017. As of September 7, 2024: https://www.rand.org/pubs/research_reports/RR1970.html
Chicago Manual of Style
Robinson, Eric, Daniel Egel, Patrick B. Johnston, Sean Mann, Alexander D. Rothenberg, and David Stebbins, When the Islamic State Comes to Town: The Economic Impact of Islamic State Governance in Iraq and Syria. Santa Monica, CA: RAND Corporation, 2017. https://www.rand.org/pubs/research_reports/RR1970.html. Also available in print form.
BibTeX RIS

Research conducted by

This project is a RAND Venture. Funding was provided by gifts from RAND supporters and income from operations. The research was conducted within the Intelligence Policy Center of the RAND National Security Research Division (NSRD).

This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.