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Fiscal Federalism and Petroleum Resources in Iraq


  • Grant Bishop

    (World Bank Institute)

  • Anwar Shah

    (World Bank Institute)


With over 95% of Iraq’s government budget received from oil revenues, an agreeable inter-governmental framework for managing petroleum resources and for distributing revenues is aptly regarded as the lynchpin of federalism. Iraq has great potential to develop a fiscal framework, consistent with sound principles and best practices, that will distribute revenues equitably and efficiently, decentralize resource management where appropriate, and bind the country together as a stable federation. As in most resource-rich countries, Iraq’s petroleum deposits are unevenly spread and deposits differ in productive capacity, cost of extraction and processing, and quality of crude. Moreover, Iraq’s petroleum infrastructure requires extensive repair and reinvestment in order to maximize its production potential. Furthermore, large areas of Iraq remain unexplored, particularly Iraqi Kurdistan and the Western Desert, and preliminary assessments point to large potential reserves.

Suggested Citation

  • Grant Bishop & Anwar Shah, 2008. "Fiscal Federalism and Petroleum Resources in Iraq," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0826, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper0826

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    References listed on IDEAS

    1. James Otto & Craig Andrews & Fred Cawood & Michael Doggett & Pietro Guj & Frank Stermole & John Stermole & John Tilton, 2006. "Mining Royalties : A Global Study of Their Impact on Investors, Government, and Civil Society," World Bank Publications, The World Bank, number 7105.
    2. Eric Mottu & Ehtisham Ahmad, 2002. "Oil Revenue Assignments; Country Experiences and Issues," IMF Working Papers 02/203, International Monetary Fund.
    3. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    4. International Monetary Fund, 2005. "Iraq; Considerations on Intergovernmental Fiscal Relations for the Constituent Assembly," IMF Working Papers 05/69, International Monetary Fund.
    5. Paul Collier & Jan Willem Gunning, 2005. "Asset Policies During an Oil Windfall: Some Simple Analytics," The World Economy, Wiley Blackwell, vol. 28(10), pages 1401-1415, October.
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