Choices And Potential Outcomes

Economic Incentives

Economic incentives are factors that influence the consumers in a certain way to assist with the generation of a proper outcome. The application of financial incentives depends on the situation within the economy, and they work towards the identification of areas, which are of great value to the economy. The positive economic incentives seek to reward individuals for the activities that they carry out, and relate to their actions in a profitable manner. On the other hand, the negative incentives work towards punishing the public for decisions that they undertook, and it affects how they conduct their activities and come out to relate to the significant factors that drive the economy (Levi, 2015). Hence, economic incentives influence the financial outcome within the community. Had Iraqi applied a positive economic stimulus in the course of their 1991-2003 war, the country could have become a better place, with strong commercial backing.


In the pre-war economy, had Iraqi not engaged in the war but instead used a positive economic incentive on Kuwait, the country could have grown to a better place. The conditions and oil deposits in the country before the war started would make it the largest oil producer in the world. In the instance where Kuwait nationals were found drilling into the Iraqi fields for oil, the country’s leadership could have used the chance to foster a trade treaty between the two countries. Salinization had ruined the Iraqi fields, and it affected the agricultural output, while Kuwait had sufficient farm production and this made the state to provide to its citizens sufficiently. Thus, if the Iraqi leadership would have fostered an economic treaty, in this case, different advantages could have been realized.

Primarily, the use of the bargain could make the country to have a chance to rely on the agricultural produce from their neighboring country, in a trade with oil. This change could have enhanced the health of the members of the community and productivity of the oil workers. Therefore, the chance to trade with Kuwait on agricultural products would ensure that Iraqi was an excellent destination for oil trade and their tariffs on import products could bring the economy towards a growth model (Rode et al. 2015). Hence, the use of the positive incentive could have led to better relations in the country and enhanced on their dependency levels with the state.

On the other hand, oil exports could ensure the country has great industrialization. The massive oil deposits within the state could lead to mass sales and growth of the economy by the creation of chances to grow towns near the mineral areas. These towns could be funded by revenue from the mining regions, and it would serve as a significant economic indicator in the country. The trade with Kuwait could also attract the opening of other agricultural industries within Iraq to look into the issues that affect their agriculture. Within these changes, the 1990’s Iraqi communities could witness growth and ensure there are different economic strengths within the nation. Use of trade as a way to interact with the other Gulf nations could ensure that the country has a strong trade rapport with governments both in the Gulf region and beyond, therefore utilizing the chances to change the phase of their nation.

Iraqi had loans to cater for before the nation plunged into massive war. The war led to more investments that would see the country having to part with more economic sacrifices to keep up with its activities (Rode et al. 2015). More than a decade of war saw Iraqi plunge into economic decadence that spoilt their chance of becoming a leading economic bloc in the Gulf region. On the other hand, lootings led to the depletion of the oil fields and in the long term, no benefit as accrued from the decade-long of war with the UN and Kuwait. Had the government of Iraq chosen to have a positive economic incentive of colluding with Kuwait, the country could have paid off all of the loans and engaged in strong economic activities like the rest of their gulf nations, Saudi Arabia and UAE. The use of their power in the oil industry could, therefore, provide the country with a chance to industrialize, urbanize and build on capabilities that attract a better advantage for their economic activities. The industrialization could have invited parties from western nations and greater Asia to help with making the economy. Therefore, had the country taken the chance to apply the positive incentive, better outcome for the citizens, their industries and prospects in various fields would be ensured.

The decline in the Iraqi economy was caused by the war that they attracted through the negative reaction that they had adopted. The response saw a worldwide uproar on the conduct of Iraqi in the Middle East and led to war within the nation’s lands. The war depleted oil resources, led to the destruction of their industries, destruction of towns and a majority of the population never had access to adequate education. These instances, therefore, show the extent of influence of the negative incentive (Rode et al. 2015). However, had the country applied a positive incentive as aforementioned, better outcomes could have been ensured. Iraqi could have established a robust economy because of oil, had excellent relations with the neighboring countries and enhanced their industrialization and research on the development of agricultural models. The positive incentive could have worked to increase the economic power of the nation, a direct contrary to the outcomes of the negative motivation provided.

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In conclusion, positive economic incentives can work to achieve what negative financial incentives cannot. This means that any nation that applies a positive motivation has the chance to integrate valuable activities to better their economy, an outcome that the negative incentives cannot present. Therefore, the use of positive incentives brings about better returns for nations and makes them have a chance to grow economically.


  • Levy, J. S. (2015). Counterfactuals, causal inference, and historical analysis. Security Studies, 24(3), 378-402.
  • Rode, J., Gómez-Baggethun, E., & Krause, T. (2015). Motivation crowding by economic incentives in conservation policy: A review of the empirical evidence. Ecological Economics, 117, 270-282.

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