experiences of Colombia, Indonesia and Canada demonstrate the difficulty of addressing unequal revenue distribution among sub-nationals, even with an equalisation system. The problem is likely to be even worse in Iraq, which has no such system. The asymmetric nature of the revenue sharing system means that only 6.8% of the total budget is transferred to provinces (this includes petrodollar payments). This is less than their real expenditures. Oil price volatility also affects the amount that they receive, especially as there are no short-term funds to protect the money transferred. The volatility of prices affects the other provinces more than Kurdistan because, unlike Kurdistan, there is no binding formula protecting their transfer. The literature indicates that the revenue sharing system is designed to match revenue to expenditure needs (Seale, 2007; Boadway and Shah, 2009), but this is not happening in Iraq. Transfers to the provinces are not being made according to the needs criterion, which one assumes should be based on the number of people living in poverty or the fiscal gap. Poorer areas do not receive larger transfers, especially if they are not resource-rich. Chapter Nine: Conclusions 9.1 Introduction This chapter presents the main conclusions and implications of this study. It begins with an overview of the main purpose and the research study’s questions, before examining the contribution it makes to the literature and policy analysis. The final sections consider the limitations of the study and offer recommendations for future research. 9.2 Overview of the study This study aims to characterise Iraqi oil governance since the 2003 invasion and the toppling of Saddam Hussein, focusing mainly on the distribution of oil revenues among regions. To fully understand current regional Iraq’s distribution model, it is necessary to first understand its revenue collection policy. Accordingly, the thesis examines petroleum fiscal regime, Iraq’s comparing the collection policies of the central government and the KRG, before moving on to the main research question of the regional distribution of oil revenues.
experiences of Colombia, Indonesia and Canada demonstrate the difficulty of addressing unequal revenue distribution among sub-nationals, even with an equalisation system. The problem is likely to be even worse in Iraq, which has no such system. The asymmetric nature of the revenue sharing system means that only 6.8% of the total budget is transferred to provinces (this includes petrodollar payments). This is less than their real expenditures. Oil price volatility also affects the amount that they receive, especially as there are no short-term funds to protect the money transferred. The volatility of prices affects the other provinces more than Kurdistan because, unlike Kurdistan, there is no binding formula protecting their transfer. The literature indicates that the revenue sharing system is designed to match revenue to expenditure needs (Seale, 2007; Boadway and Shah, 2009), but this is not happening in Iraq. Transfers to the provinces are not being made according to the needs criterion, which one assumes should be based on the number of people living in poverty or the fiscal gap. Poorer areas do not receive larger transfers, especially if they are not resource-rich. Chapter Nine: Conclusions 9.1 Introduction This chapter presents the main conclusions and implications of this study. It begins with an overview of the study’s main purpose and the research questions, before examining the contribution it makes to the literature and policy analysis. The final sections consider the limitations of the study and offer recommendations for future research. 9.2 Overview of the study This study aims to characterise Iraqi oil governance since the 2003 invasion and the toppling of Saddam Hussein, focusing mainly on the distribution of oil revenues among regions. To fully understand Iraq’s current regional distribution model, it is necessary to first understand its revenue collection policy. Accordingly, the thesis examines Iraq’s petroleum fiscal regime, comparing the collection policies of the central government and the KRG, before moving on to the main research question of the regional distribution of oil revenues.