ABSTRACT
Painful and costly as Iraq’s invasion and occupation were to Kuwait, the crisis and subsequent liberation offered its government and people a unique opportunity to reinvigorate their previously stagnant economy with new institutions and to creatively redefine their external and internal economic boundaries. Several proposals for serious economic reform had been proffered in the 1980s, and many similar ones were discussed during the years after liberation. However, none of these was seriously undertaken and no fresh ideas came forth in the 1990s. Instead, Kuwait intensified its current and future dependence on the oil sector and on the United States, adjusting its external boundaries to accommodate this policy choice. Furthermore, it rigidified its internal social boundaries instead of relaxing them as part of a reform that might have diversified the economy and enhanced non-state economic activities. Kuwait’s weak and erratic economic performance in the decade from 1991 to 2001 reflected these development-constricting decisions.
