Financial Policy Shifts Between Financial Sustainability Requirements and Public Spending Dynamics: A Case of Iraq

This study aims to diagnose and analyze financial sustainability indicators in Iraq for the period 2003–2023. It also aims to identify the most significant challenges to financial sustainability in Iraq, as well as assess the effectiveness of the financial policies implemented in Iraq. This study employs a quantitative approach to analyze financial sustainability indicators in Iraq from 2003 to 2023. Secondary data were extracted from reports issued by the World Bank, the International Monetary Fund, and the Arab Monetary Fund, as well as national sources. The research aims to identify the main challenges facing public finances. It also aims to propose reform policies that support achieving financial sustainability in the medium and long terms. The results indicate that excessive reliance on oil as the primary source of public revenue has contributed to recurring financial crises, negatively impacting financial sustainability. This is due to fluctuations in oil revenue volumes resulting from price changes in global markets. The widespread financial and administrative corruption in most of the state's institutions has led to waste and misallocation of resources, increasing pressure on legislators, and reducing the efficiency of government spending. The study emphasizes the need for policymakers to adopt a balanced approach that addresses both short-term economic stability and long-term financial sustainability goals in Iraq. This includes investing oil revenues in economic and social development projects, as they constitute more stable and sustainable sources of revenue.