Measuring the Direct and Indirect Impact of Public Expenditures on Economic Growth in Iraq During the Period (1990 – 2020)

Abstract

Public expenditures are one of the financial tools that the government uses to influence economic activity to achieve the set goals such as stability and economic growth. The Iraqi economy is characterized by the public sector’s control over the majority of economic activities over the long years. He asks himself, did the rise in the volume of public expenditures lead to the revitalization of the economic sectors, and then the rise in the gross domestic product and the achievement of economic growth? Therefore, this research aims to measure and analyze the impact of public expenditures, both direct and indirect, on the gross domestic product during the period (1990-2020), and to achieve this goal, the descriptive approach and quantitative analysis were relied on using the ARDL model. The research concluded that there is a relationship between public expenditures and local economic activities, directly and indirectly, so that an increase in public expenditures by (1%) leads to an increase in the domestic product by (3.80%) and an increase in activity in the local economic sectors by (0.04 to 2.4%). 68%) according to the quality of activities and sectors, and the research suggested the need to work on raising the efficiency of public expenditures to achieve balanced growth between local economic activities on the one hand and GDP on the other hand and to achieve the required economic growth in Iraq.