Achieving public spending for economic diversification in Iraq for the period (2003-2022)

Economic diversification policy works on developing the national economy's ability to finance and overcome obstacles in facing its internal and external commitments by enhancing the effectiveness of public spending. It also aims to reduce sources of extravagance and waste to the maximum extent. Therefore, economic diversification aims to achieve the highest productivity from public spending and increase the productivity of other sectors and their contribution to the gross domestic product (GDP). This contributes significantly to the general budget, which is often unstable and closely linked to changes in export commodity prices, specifically oil, as well as sudden economic crises. Thus, economic diversification policy addresses problems related to the impact of revenue from a single source on the economy. It is assumed that economic diversification policy has a significant and profound impact on reducing reliance on a single vulnerable source and external crises. Therefore, an inductive approach was adopted to provide a simple theoretical background on the variables, study the relationship between them, and the result reached in the research when diversification is absent in the rentier economy, this will inevitably lead to major economic and social crises, resulting in disturbances affecting all social classes. Prominent examples of these problems include reducing the role of the private sector and increasing the public's focus on a particular sector over another, leading to increased pressure on that sector and neglect of the sector from which people have moved due to the absence of funding and government support. The economy remains dependent and closely linked to external events, such as changes in oil prices, and if public spending is not linked to a sound and planned spending policy, it will produce adverse effects in the short or long term.