Measuring and analyzing the impact of public expenditures on economic growth and unemployment in Iraq during the period (2000-2023)

Abstract

Public expenditures are among the most prominent financial tools relied upon by governments to achieve their economic, political, and social goals, particularly in countries with structural economic imbalances. Public expenditures are of great importance to the Iraqi economy due to its heavy reliance on oil revenues, which makes spending subject to constant fluctuations due to fluctuations in oil prices in global markets. This research aims to analyze the impact of public expenditures and their types on the gross domestic product (GDP) and unemployment rates, with the aim of providing suggestions for redirecting public expenditures toward optimal use. To achieve this goal, annual time data for the period (2000-2023) were used and analyzed, followed by the application of the Autoregressive Distributed Lag (ARDL) model, given its ability to analyze short- and long-term relationships between the variables studied in the research. The research concluded that public expenditures have a positive impact on the GDP as an indicator of economic growth, and a negative impact on unemployment rates, meaning that increasing public expenditures led to a decrease in unemployment rates during the research period. However, the economic reality in Iraq continues to suffer from slow growth and high unemployment rates, which reflects the weak efficiency of public spending in achieving development goals.