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The Impact of Government Spending on Economic Development
American Journal of Economics and Business Management,
Vol. 8 No. 7 (2025): July
Abstract
Public spending is an important tool within the framework of economic policy to achieve economic development goals. It is therefore considered the government's reliant tool for intervening in economic life. Public spending is one of the state's tools through which it seeks to increase the gross domestic product, achieve economic and social goals, and achieve economic stability by balancing supply and demand. It is well known that the Iraqi economy suffers from major problems, challenges and imbalances for several reasons, both internal and external. The Iraqi economy suffers from rentierism and a lack of clarity in the development plans of the economic sectors, which has resulted in the squandering, loss and failure to achieve wealth. It has become clear that the economic obstacles facing countries are a result of poor financial planning, backward financial policy, especially spending, and its inability to solve the problems it faces. Therefore, attention must be paid to economic development because it is capable of moving the country from a backward economic reality to a state of prosperity and progress. In order to encompass the content of the research, some theoretical concepts of government spending and economic development were addressed, as well as the effects of both government spending on some indicators of sustainable economic development. Many conclusions were reached that were based on practical reality, and the most important reasons for the failure of government spending to meet challenges and achieve its development goals. In light of this, a number of recommendations were made that lead to raising the level of government spending in order to achieve sustainable economic development.
The level of government spending to achieve sustainable economic development.
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- 1. Maher Al-Sharif, “Economic and Social Development,” The Arab Encyclopedia, 2017, p. 15.
- 2. Sahar Qasim Muhammad, “The Mechanisms Required for Iraq’s Transition from a Planned Economy to a Market Economy,” Central Bank of Iraq, General Directorate of Statistics and Research, 2011, p. 4.
- 3. Faris Abdul Razzaq, “The Government of the Poor and Public Spending: A Study of the Budget Deficit Phenomenon and Its Economic and Social Impacts in Arab Countries,” Center for Arab Unity Studies, 1997, p. 30.
- 4. Maitham Khadir Jawad Al-Yasari, “Fiscal Policy in Light of Oil Shocks (Saudi Arabia and Iraq): A Case Study,” unpublished master’s thesis, University of Karbala, College of Administration and Economics, 2016, p. 7.
- 5. Walid Ismail Al-Sayfo and others, “Fundamentals of Analytical Econometrics,” Dar Al-Ahlia for Publishing and Distribution, 1st ed., Amman, 2006, p. 47.
- 6. Kanaan Abdul Latif Abdul Razzaq, Ansam Khaled Hassan Al-Jubouri, A Comparative Study of Cointegration Regression Estimation Methods with Practical Application, Iraqi Journal of Economic Sciences, 10th Year, Issue 33, 2011.
- 7. Abdul Latif Hassan - Ali Abdul Zahra, Analysis of Long-Run Equilibrium Relationship Using Unit Root Tests and the Autocorrelated and Time Lag (ARDL) Model Combination Method, Journal of Economic Sciences, Issue 34, Volume 9, 2013, pp. 177-178.
- 8. Maher Al-Sharif, “Economic and Social Development,” Arab Encyclopedia, 2017, p. 15.
- 9. Encyclopedia of Business and Finance, 2nd ed. Economic Development COPYRIGHT 2007, from the website https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/economics-terms-and-concepts/economic-development
- 10. Awf Al-Kafrawi, Public Expenditure in Islam, Shihab Foundation for Printing and Publishing, Alexandria, 1988, p. 21
- 11. Abdullah Al-Sheikh Mahmoud Al-Taher, Introduction to the Economics of Public Finance, King Saud University Press, Riyadh, 1988, p. 134.
- 12. Abdul Karim Sadiq Barakat and others, Public Finance, University House for Printing and Publishing, Beirut, 1986, p. 118
- 13. Abdul Hadi Al-Najjar, Economics of Government Activities, Kuwait University Publications, Kuwait, 1982, p. 36.
- 14. Ali Muhammad Khalil and Suleiman Ahmad Al-Lawzi, Public Finance, Dar Zahran for Publishing and Distribution, Amman, 1999, p. 89.
- 15. Hilmi Majeed Muhammad Al-Hamdi, In Public Finance, The Open University for Printing and Publishing, Tripoli, 1992, p. 67.
- 16. Khaled Shehadeh Al-Khatib and Ahmad Zuhair Shamiya, Foundations of Public Finance, 1st ed., Wael Publishing House, Amman, Jordan, 2003, p. 79.
- 17. Yahya Qasim Ali Sahl, Al-Sahl in Public Finance and Yemeni Tax Legislation, National Library, Aden, 2000, p. 24.
- 18. Muhammad Fuad Ibrahim, Principles of Public Finance, Al-Nahda Al-Masryia Library, Cairo, undated, p. 21.
- 19. Riyad Al-Sheikh, Public Finance, Dar Al-Nahda Al-Arabiya, Cairo, 1969, p. 60.
- 20. Rifaat Mahjoub, Public Finance, Dar Al-Nahda Al-Arabiya, Cairo, 1971, p. 32.
- 21. Adel Ahmed Hashish, Public Finance Economics, University Culture Foundation, Alexandria, 1983, p. 98.
- 22. Muhammad Safwan, Economic Development, Afak House, Beirut, 1998, p. 179.
- 23. Saeed Jafri, The National Initiative for Human Development, Casablanca Publishing House, Morocco, 2007, p. 67.
- 24. Abdul-Mutti Muhammad Assaf, Development Administration, 1st ed., Kuwait, 1988, p. 265.
- 25. Muhammad Al-Rifai, Government Administration, Management, and Development, 1st ed., Kuwait, 1999, p. 266.
- 26. Yaslam, Awad bin Awad, The Determinants of Gross Investment Growth and Its Role in the Development Process in the Republic of Yemen during the Period 1970-1994, Unpublished Master’s Thesis, College of Administration and Economics, University of Mosul, p. 34.
- 27. Al-Fahdawi, Khamis Khalaf Musa and Radi, Mazen Issa, Economic Development, House of Books and Documents, Baghdad, Iraq, 2000, p. 10.
References
1. Maher Al-Sharif, “Economic and Social Development,” The Arab Encyclopedia, 2017, p. 15.
2. Sahar Qasim Muhammad, “The Mechanisms Required for Iraq’s Transition from a Planned Economy to a Market Economy,” Central Bank of Iraq, General Directorate of Statistics and Research, 2011, p. 4.
3. Faris Abdul Razzaq, “The Government of the Poor and Public Spending: A Study of the Budget Deficit Phenomenon and Its Economic and Social Impacts in Arab Countries,” Center for Arab Unity Studies, 1997, p. 30.
4. Maitham Khadir Jawad Al-Yasari, “Fiscal Policy in Light of Oil Shocks (Saudi Arabia and Iraq): A Case Study,” unpublished master’s thesis, University of Karbala, College of Administration and Economics, 2016, p. 7.
5. Walid Ismail Al-Sayfo and others, “Fundamentals of Analytical Econometrics,” Dar Al-Ahlia for Publishing and Distribution, 1st ed., Amman, 2006, p. 47.
6. Kanaan Abdul Latif Abdul Razzaq, Ansam Khaled Hassan Al-Jubouri, A Comparative Study of Cointegration Regression Estimation Methods with Practical Application, Iraqi Journal of Economic Sciences, 10th Year, Issue 33, 2011.
7. Abdul Latif Hassan - Ali Abdul Zahra, Analysis of Long-Run Equilibrium Relationship Using Unit Root Tests and the Autocorrelated and Time Lag (ARDL) Model Combination Method, Journal of Economic Sciences, Issue 34, Volume 9, 2013, pp. 177-178.
8. Maher Al-Sharif, “Economic and Social Development,” Arab Encyclopedia, 2017, p. 15.
9. Encyclopedia of Business and Finance, 2nd ed. Economic Development COPYRIGHT 2007, from the website https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/economics-terms-and-concepts/economic-development
10. Awf Al-Kafrawi, Public Expenditure in Islam, Shihab Foundation for Printing and Publishing, Alexandria, 1988, p. 21
11. Abdullah Al-Sheikh Mahmoud Al-Taher, Introduction to the Economics of Public Finance, King Saud University Press, Riyadh, 1988, p. 134.
12. Abdul Karim Sadiq Barakat and others, Public Finance, University House for Printing and Publishing, Beirut, 1986, p. 118
13. Abdul Hadi Al-Najjar, Economics of Government Activities, Kuwait University Publications, Kuwait, 1982, p. 36.
14. Ali Muhammad Khalil and Suleiman Ahmad Al-Lawzi, Public Finance, Dar Zahran for Publishing and Distribution, Amman, 1999, p. 89.
15. Hilmi Majeed Muhammad Al-Hamdi, In Public Finance, The Open University for Printing and Publishing, Tripoli, 1992, p. 67.
16. Khaled Shehadeh Al-Khatib and Ahmad Zuhair Shamiya, Foundations of Public Finance, 1st ed., Wael Publishing House, Amman, Jordan, 2003, p. 79.
17. Yahya Qasim Ali Sahl, Al-Sahl in Public Finance and Yemeni Tax Legislation, National Library, Aden, 2000, p. 24.
18. Muhammad Fuad Ibrahim, Principles of Public Finance, Al-Nahda Al-Masryia Library, Cairo, undated, p. 21.
19. Riyad Al-Sheikh, Public Finance, Dar Al-Nahda Al-Arabiya, Cairo, 1969, p. 60.
20. Rifaat Mahjoub, Public Finance, Dar Al-Nahda Al-Arabiya, Cairo, 1971, p. 32.
21. Adel Ahmed Hashish, Public Finance Economics, University Culture Foundation, Alexandria, 1983, p. 98.
22. Muhammad Safwan, Economic Development, Afak House, Beirut, 1998, p. 179.
23. Saeed Jafri, The National Initiative for Human Development, Casablanca Publishing House, Morocco, 2007, p. 67.
24. Abdul-Mutti Muhammad Assaf, Development Administration, 1st ed., Kuwait, 1988, p. 265.
25. Muhammad Al-Rifai, Government Administration, Management, and Development, 1st ed., Kuwait, 1999, p. 266.
26. Yaslam, Awad bin Awad, The Determinants of Gross Investment Growth and Its Role in the Development Process in the Republic of Yemen during the Period 1970-1994, Unpublished Master’s Thesis, College of Administration and Economics, University of Mosul, p. 34.
27. Al-Fahdawi, Khamis Khalaf Musa and Radi, Mazen Issa, Economic Development, House of Books and Documents, Baghdad, Iraq, 2000, p. 10.