THE IMPACT OF OIL REVENUES ON THE CORRUPTION PERCEPTIONS INDEX USING THE ARDL TECHNIQUE IN IRAQ FOR THE PERIOD 2003–2025

Abstract

The current study aims at shedding light on the Iraqi economy, which is characterized by economic dualism, a rentier mono-structure, and economic dependency due to its link with highly volatile global oil prices and external shocks. Iraq has also experienced wars, economic sanctions, terrorism, and displacement, all of which have negatively affected corruption indicators. The Corruption Perceptions Index appears to decline with increasing oil revenues, which account for more than 90% of total public revenues. Reconstruction requirements exceed the capacity of institutions to ensure proper oversight and control corruption, especially in relation to bribery and excessive public spending. This study tests the statistical significance of the relationship between oil revenues and the Corruption Perception Index from the descriptive, analytical and econometric point of view, using the ARDL model through EViews to check the effect of oil revenues on corruption in Iraq. The study stresses that corruption rates are largely determined by institutional factors and by the latest anti-corruption technologies. It also stresses the need to plan for and take advantage of high oil revenues by building institutions and digital services, enhancing efforts to combat corruption, and investing in sovereign wealth funds and economic diversification. This helps limit the resource curse and Dutch Disease, two major challenges faced by oil economies. Finally, the research shows that the Iraqi budget is weak due to the lack of fiscal sustainability, and calls for the effective use of oil surpluses in economic development and reform programs.