Monday, January 31, 2011

Financial Analysis of al-Qa'ida in Iraq

An Economic Analysis of the Financial Records of al-Qa'ida in Iraq" is a fascinating look at the business side of a militant organisation. Financial records of al-Qa'ida for the Anbar province of Iraq were captured. Some of the insights from this were that the militant organisation had a similar structure to the forces opposing them and that the militants were so successful financially from extortion and theft, they could export some surpluses to fund foreign groups. Militant fighters were not well paid for their work, but even so mounting attacks was expensive and the authors suggest that disrupting the finances of militant groups could be an effective way to reduce attacks. A Summary (0.1 MB) and the Full Document (0.8 MB) are avialable.

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

by Benjamin Bahney, Howard J. Shatz, Carroll Ganier, Renny McPherson, Barbara Sude with Sara Beth Elson, Ghassan Schbley

This monograph analyzes the finances of the militant group al-Qa'ida in Iraq (AQI) in Anbar province during 2005 and 2006, at the peak of the group's power and influence. The authors draw on captured 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. Some of their conclusions are: AQI was a hierarchical organization with decentralized decisionmaking; AQI in Anbar was profitable enough to send substantial revenues out of the province in 2006; AQI relied on extortion, theft, and black market sales to fund its operations in Anbar; AQI needed large, regular revenue sources to fund its operations, but its administrative leaders did not hold much cash on hand. The authors' interpretation of data on compensation practices and participants' risk of death indicates that AQI members were poorly compensated and suggests that they were not motivated primarily by money to join the group. The authors also find that mounting attacks required organizational expenditures well beyond the cost of material used in attacks. One major conclusion is that disrupting AQI's financial flows could disrupt the pace of their attacks.

Document Details

  • Copyright: RAND Corporation
  • Availability: Available
  • Format: Paperback
  • Pages: 114 ...
  • ISBN/EAN: 9780833050397
  • Document Number: MG-1026-OSD
  • Year: 2010
  • Series: Monographs


  1. Introduction
  2. AQI and the Political and Economic Environment in Anbar Province
  3. Auditing al-Qa'ida in Iraq
  4. The Economics of AQI's Compensation
  5. The Flow of Expenditures and the Pace of Attacks
  6. Implications
  • Appendix A:Anbar Province
  • Appendix B: Time Line of Events in Anbar Province

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