The effect of the government's revenue generation on economic growth

Subject Areas : Bi-quarterly Journal of development economics and planning

maryam emamimibodi ^{1 *} , Hossein Ali Yasin Al Abidi ²

1 - Department of Accounting, Islamic Azad University, Shahinshahr Branch, Isfahan, Iran
2 - Department of Economic, Islamic Azad University, Isfahan (Khorasgan) Branch, Isfahan, Iran

Received: 2023-11-02 Accepted : 2024-01-03 Published : 2024-01-13

Keywords: Economic Growth, Oil Revenue, tax revenue,

Abstract :

Hence, measuring the dependence of Iraq's budget on oil revenue and investigating the effect of the share of each source of income in financing the government on economic growth, considering the possibility of the resource curse phenomenon in Iraq, is the focus of this study. Therefore, the main purpose of this research was to investigate the impact of the share of oil income and tax income on the economic growth of Iraq and to compare the share of tax income with the share of oil income on the economic growth of Iraq. In this research, the autoregression model with a wide break has been used seasonally in the period from 2008 to 2020 to investigate the objectives and assumptions. Based on the results, the first, second and third hypotheses of the research were confirmed. To put it better, both oil income and tax income have had a positive and significant effect on Iraq's economic growth, and also in support of the third hypothesis, the effect of oil income has been greater than tax income, which shows that the financing of the Iraqi government is mostly through oil income and shows that the economy of this country is dependent on oil revenues. On the other hand, the increase in government tax revenue and its effect on economic growth in the long term can be considered for long-term planning in Iraq.