ADDRESSING THE HUMAN CAPITAL CRISIS - A Public Expenditure Review for Human Development Sectors in Iraq

Jul 19, 2026

This public expenditure review examines the human capital crisis in Iraq through an evidence-based analysis of macro-fiscal conditions and how public spending supports health, education, and pensions/social insurance. It reviews volatile growth, revenue and expenditure patterns, and the fiscal space available for human development spending. For each sector, it assesses context, outcomes, equity, financing, efficiency, and service delivery constraints, then proposes policy recommendations to improve access to quality services, strengthen preparedness, and enhance fiscal and institutional arrangements.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages140

Reading Time5 h 53 min

AccessFree to download

Executive Summary

Chapter 1: Macro Fiscal Context and Analysis - Creating Fiscal Space for Human Capital Spending

Iraq’s volatile economic growth

Fiscal Revenue and Public Expenditure Analysis

Creating the Fiscal Space for Human Development Spending in Iraq

Snapshot of Public Financial Management

Measures for creating fiscal space

Chapter 2: Health Sector

Health Context, Outcomes, and Equity

Health system capacity

Health financing

Recommendations and policy options

Chapter 3: Education Sector

Education Sector Context and Outcomes

Adequacy of Education Spending

Equity of Education Spending

Efficiency of Education Spending

Institutional Arrangements and Public Financial Management (PFM)

Conclusion and Policy Recommendations

Chapter 4: Pensions and Social Insurance

Public Disc losure Authorized ADDRESSING THE HUMAN CAPITAL CRISIS A Public Expenditure Review for u ub lic Disclosure th ir el Disclosure Authorized Pub lic Disclosure ADDRESSING THE HUMAN CAPITAL CRISIS A Public Expenditure Review for Human Development Sectors in Iraq 3 List of Contents Executive Summary-English 10 | Chapter 1 : Macro Fiscal Context and Analysis-Creating Fiscal Space for Human Capital Spending | 21 | | --- | --- | | 1.1. Iraq’s volatile economic growth | 22 | | 1.2. Fiscal Revenue and Public Expenditure Analysis | 24 | | Revenue | 34 | | Expenditures | 27 | | Economic classification | 27 | | Administrative classification | 30 | | 1.3. Creating the Fiscal Space for Human Development Spending in Iraq | 33 | | 1.4. Snapshot of Public Financial Management | 34 | | 1.5. Measures for creating fiscal space | 36 | | 1.6.Conclusion | 37 | | Chapter 2 : Health Sector | 39 | Introduction 40 2.1 Health Context, Outcomes, and Equity 42 Trends in Health Outcomesand Disease Burden 43 Child health 47 Maternal health 48 Non-communicable diseases 51 2. 2 Health system capacity 51 Service delivery context and governance 51 Physical resources and supply chains 53 Human resources for health 57 Service utilization and quality of care 59 2.3 Health financing 62 Revenue raising arrangements and health financing landscape 62 Government health financing 64 Out of pocket and private health financing 68 Efficiency 71 2.4 Recommendations and policy options 75 Improving access to quality services 76 Increasing equity 78 Maximizing efficiency 79 Ensuring preparedness against current and future pandemics 80 Chapter 3: Education Sector 83 Introduction 84 3.1 Education Sector Context and Outcomes 85 Main sector trends: accomplishments and challenges 86 Sector outcomes: Participation and completion rates 88 Sector outcomes: Student learning outcomes 91 Impact of fragility and conflict on service delivery 93 3.2 Adequacy of Education Spending 93 Amount of public spending on education and recent trends 93 Composition of public spending on education and recent trends 96 Amount of household spending 98 Ensuring adequacy of public spending in education 98 3.3 Equity of Education Spending 99 Equity in access to education 99 Equity in government spending on education by governorate 102 Equity in household spending on education 102 Enhancing equity of public spending in education 105 3.4 Efficiency of Education Spending 105 Education efficiency at system level 105 Education efficiency at subnational level 107 Improving efficiency of public spending in education 108 3.5 Institutional Arrangementsand Public Financial Management (PFM) 109 Institutional arrangements and decentralization 109 Service delivery and institutional capacity 110 Public financial management (PFM) and budget 112 Execution in Education Addressing institutional and PFM challenges in education 114 3.6 Conclusion and Policy Recommendations 114 Chapter 4: Pensionsand Social Insurance Chapter 119 Introduction 120 4.1 Institutional and Legislative Context of Pensions in Iraq 120 4.2 Assessment of the pension system’s performance 122 under different scenarios Scenario 1, Law 9/2014 (baseline, before implementing 125 the amendments of 2019) Scenario 2, Amended Law 9/2014 126 Scenario 3, Draft Law on Social Insurance (referred to 126 as draft law of 2017) Sustainability, Scenario 4, Proposed Reform Package 127 4.3 Conclusion and Policy Recommendations 132 List of Figures Figure 1. Education expenditures compared to peers 7 Figure 2. Health Expenditures compared to peers 7 Figure 3. Fiscal Scenarios 11 Figure 4. Decades of Political Instability and Oil Price 19 Volatility Figure 5. GDP growth 20 Figure 6. Per capita GDP,(2005=100) 20 Figure 7 . Growth in per capita wealth (2005-2014) 21 Figure 8. Contribution to growth in per capita 21

FAQs

How does the report frame Iraq’s human capital crisis and fiscal constraints?

It links human capital outcomes to Iraq’s macro-fiscal context, focusing on volatile economic growth and the revenue-expenditure structure that shapes available fiscal space for human development spending.

What key areas are assessed in the health sector?

The report evaluates health outcomes and equity, health system capacity, health financing arrangements, and service delivery quality, then provides recommendations to improve access, equity, efficiency, and pandemic preparedness.

How does the report evaluate education spending and its policy implications?

It reviews sector outcomes, the adequacy and equity of education spending, and system and subnational efficiency, followed by institutional and PFM-related recommendations to address execution and capacity challenges.

Jul 19, 2026

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