This study presents a review and analysis of Iraqi-Kuwaiti relations as they developed and changed over time. It attempts to look beyond the immediate political and legal aspects of this difficult relationship, while at the same time drawing attention to the history and potential of functional co-operation between the two states. The wider subject of this enquiry might be defined as the politics of economic relations between the two, along with the economics of political relations. While in the context of the Kuwait crisis the elements of friction and conflict between the two countries have been at the forefront of attention, it is worth recalling the record of co-operation between them (even if friction was never far below the surface). At the same time, one is struck by the fact that where conflict did erupt, it was more often than not rooted in economic issues and dynamics, and in functional needs.