Since the British mandate, Jordan has been linked to nearly every major violent conflict in the region. From multiple interstate wars, a civil war, and through to today’s regional conflicts, the effects on Jordan’s socio-political and socio-economic development have been profound. This paper analyzes Jordan’s relationship to its longest war, the case of Iraq beginning in the 1980s. The two countries share historical and social linkages in which war has played a large role. The character of violent conflict in Iraq has shifted from multiple instances of inter-state conflict in the 1980s to international sanctions, occupation, and metastasizing sub-state conflict tied to America’s wars on terrorism. How have these changing patterns of violent conflict shaped socio-economic development in Jordan? How has the Jordanian state responded? The argument of the paper is that while regional violence has provided the Hashemite regime with short term capital flows, the long term effect has been chronic fiscal crisis. Since the 1980s and accelerating in the new century, the Jordanian state’s provision of public goods has declined in response to fiscal crisis. By contrast, the military and security capacities of the state have drastically increased pushing Jordan more toward the model of military corporatism found in Egypt and Pakistan. In terms of theory, the paper contributes to a wider scholarly literature focused on how war shapes states and economies. With a few exceptions, work on Middle Eastern cases has lagged. Much of the literature views war and war preparation as either strengthening states and their economies or demolishing them. Jordan’s experience presents a hybrid outcome at odds with standard expectations. Preparing for war and crisis has engendered a fiscal crisis, weakening parts of the public sector, at the same time it has bolstered security capacities. The dilemma the country now faces is a security sector evolving into a corporate/political actor while by contrast regional crises no longer generate resources to mediate the deepening fiscal crisis. In addition to utilizing a secondary revisionist literature on Jordan’s political economy and its links to Iraq, this paper utilizes extensive interview research with Iraqi and Jordanian traders, businessmen, and former ministry officials. It also marshals newly available tax and fiscal data from governmental and international lending agencies in Amman. This paper is part of a larger project examining Jordan’s relationship to regional war since 1916.