GOVERNMENT SPENDING BETWEEN BUDGET CONTROL AND ACHIEVING SUSTAINABLE DEVELOPMENT GOALS

Abstract

Iraq must reconcile post-conflict fiscal discipline with measurable progress toward the 2030 Sustainable Development Goals (SDGs). This study quantifies whether aggregate government expenditure is a reliable engine of SDG performance. We compile an annual time series (2000–2023) of the Sustainable Development Solutions Network's composite SDG score and real per capita government consumption outlays (Central Bank of Iraq, constant 2015 IQD). After confirming both series are I (Tetłak, 2025), we estimate an ARDL(1, 0) selected by the Akaike Information Criterion, probe structural breaks with Zivot–Andrews and apply the Pesaran–Shin–Smith bounds test for cointegration. Diagnostic checks include Breusch–Godfrey, ARCH, and CUSUM/CUSUMSQ stability tests. The results show that the short-run spending shocks are economically trivial and statistically nil (β ≈ 3.8 × 10⁻⁹, p = 0.57). The bounds F statistic (0.32 < I(0) = 4.04) and an insignificant error correction coefficient (–0.091, p = 0.44) reject any long-run equilibrium between expenditure and the SDG index. Model diagnostics confirm well-behaved residuals, and robustness checks across alternative lags, dynamic OLS, and GLS estimators leave the null results unchanged.