Iraq’s Administrative and Financial Corruption: A Perspective


Since the U.S. occupation of Iraq in 2003, ongoing political turmoil and conflicts have left Iraq in a spiral of fragile governments with weak rule of law and deep-rooted, regionally complex political interests that are difficult to handle. This situation increased the suffering which is associated with sectarianism. The risks of corruption and poor services are also prevalent. The state’s dominant position is suffering from a ruptured economy, an underdeveloped private sector, and excessive dependence on oil, with the dominance of the power of militias established for high levels of instability in the state. This paper focuses on the dangers of corruption to future generations and Iraq’s future as a state. It is evident in this study that there is a weakness in governance and the rule of parallel conduct of the militia whom their (pro-Iran) political leaders support. This has a tremendous negative impact on the economy and the ability to fight corruption. All efforts fail to place control over financial resources coupled with the weak moral commitment by the Iraqi authorities, and this problem will continue until transparent elections for a free and honest government are achieved.

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Darwish, S. (2023) Iraq’s Administrative and Financial Corruption: A Perspective. Open Journal of Business and Management, 11, 2775-2788. doi: 10.4236/ojbm.2023.116151.

1. Introduction

The views of the Citizens of Iraq regarding corruption have deteriorated in recent years. Also, confidence in the government and its agencies has eroded, which reflects an increasing division between the people and the state. Thus, in recent years, anti-corruption has arisen, and the government is trying, with limited hope, to enforce substantive reforms ( Costa, 2004 ). In other words, Iraq faces an ineffective regulatory system for combating corruption and inadequately trained and autonomous anti-corruption agencies (see Table 1). Corruption pervades the Iraqi state and culture, which attracts much concern from policymakers. The findings of numerous foreign organizations and academic articles on corruption attest to this.

Additionally, evidence reinforces the reality of human protection failure or fragility in the transformative process, which began in 2003 and continues today. According to a study conducted by Hassan, there is considerable heterogeneity in the impact of various aspects of corruption and the level at which corruption impacts Iraq in all spheres of human endeavours. Administrative inefficiency also contributes significantly to corruption ( Heidenheimer, 1970 ). However, the study’s findings indicate widespread political corruption may be due to some pressures from government circles. Subsequently, many studies indicated this drawback (see Figure 1).

One of the main challenges in Iraq’s failure to achieve human stability since

Figure 1. Some alarming statistics about corruption.

2003 is the weak health and environmental protection system. The more corruption intensifies, the fewer humanitarian activities are administered. Thus, corruption significantly affects all aspects of Iraq’s human security. The results reinforce the hypothesis that the effects of corruption dimensions on human protection vary according to dimension and the degree to which they affect people ( Dodge, 2013 ). Consequently, scholars and policymakers can perceive the enormous efforts needed to boost the status of Iraq’s corruption pattern, which has seen no noticeable change in ten years. The failed state cannot cope with the magnitude of the threat confronting Iraq now and in the coming generations (see Table 1 & Table 2).

Successive governments in Iraq since 2003 have adopted a policy of borrowing money from the International Fund and foreign countries, as well as internal borrowing from Iraqi banks. The reason for borrowing is the theft of Iraqi funds and the corruption of successive ministries. Corruption and theft have reached about 300 billion dollars in the past years. This is noted by Dr Ali Abdul-Amir Allawi, the Minister of Finance in the Kadhemi government. This policy is catastrophic because Iraq will be able to repay these debts only if the price of a barrel of oil is more than 70 Dollars, provided that there is no corruption and theft of public funds. Iraq needs exports other than oil, which accounts for about 92 per cent of Iraq’s revenues, to provide the right environment for friendly countries to invest in Iraqi projects such as electricity, oil, agriculture, and heavy industries. Iraq experienced more difficult conditions during the economic blockade that began in the 1990s but managed to overcome these difficulties due to the efficient control of state funds. Borrowing money and being unable to repay will lead to a total economic collapse and the deterioration of the Iraqi currency. The

Table 1. Iraq Rank 166/176.

Source: Transparency International’s 2016 Corruption Perceptions Index (CPI). From 2012 to 2016

Table 2. Summary of Statistics about the profile of corruption in Iraq.

most challenging issue for the state is its inability to pay salaries to four million employees (many of whom are said to be fake) who earn more than a salary. Iraq needs comprehensive administrative and financial reform to eliminate this phenomenon disguised as unemployment in the state circles. Attention must be given to the industrial and agricultural sectors and the support of the private sector. Economic openness is also fundamental to encourage Iraqi, Arab, and foreign investors to undertake new and advanced projects in the country to contribute to the development process ( Al Saadi, 2021 ).

2. Research Methodology

The researcher devised a combination of qualitative research methods by exploring the analysis of written documents and a survey of published works by professional organizations and expert authors. The case of corruption in Iraq is selected as a case study material for further analysis. The research will explore ideas and formulate a theory to summarise, categorize, and interpret this phenomenon of corruption in Iraq. The researcher will further highlight and reflect on specific sectors within the Iraqi government.

3. Objectives & Importance of the Research

The economic collapses in Iraq triggered many issues relating to managing the Iraqi economy. One of the main reasons for this failure is the corruption that has spread in all ministries within the Iraqi government and resulted in the failed state. Therefore, this paper highlights the reasons and the causes behind this phenomenon to help the Iraqi people overcome this sweeping damage to future generations.

4. Research Questions

This paper aims to answer questions about the corruption of the Iraqi government from 2003 onwards. It is glaring from international reports how Iraq’s economy is declining due to many reasons, and one of them is corruption. The researcher will therefore try to answer the following questions:

1) What reasons made Iraq the most corrupt state in the world?

2) What are the main forces behind corruption in Iraq?

3) Are there adequate measures to combat corruption?

4) What levels of governance are in operation?

5. Literature Review

5.1. Corruption and Economic Development/Impact of Corruption

The study findings revealed that corruption and its manifestations had impacted all forms of life and the public’s safety. This effect was expressed adversely in the output of successive Iraqi governments, which failed to implement initiatives, policies, schemes, and programs to achieve safety and improve living standards from 2003 to date. This resulted in a fragile state whereby public and private sector organizations cannot meet the country’s needs due to a lack of efficient governance structures ( Mironov, 2005 ). Research consistently demonstrates that societies with fewer wealth inequalities (better redistribution) experience more regular and prolonged cycles of economic prosperity (sustainable development) ( Norris et al., 2015 ; Aidt, 2003 ). Additionally, research indicates that societies with a higher satisfaction index (approval ratings) nearly often experience more frequent and sustained economic progress (sustainable development) ( OECD, 2010 ; Mishra, 2006 ).

It is also worth mentioning that corruption is fatal to every government and distorts the quest to redistribute a country’s wealth.

Additionally, it is evident that corruption frustrates citizens and causes them to doubt the effectiveness of public institutions. These facts imply that a nation plagued with corruption cannot truly experience rapid economic growth and progress ( Appiah et al., 2019 ). Corruption is now widely regarded as one of the world’s most serious problems. It is a significant obstacle to sustainable growth, disproportionately affects vulnerable people, and is corrosive to society’s structure. Globally, the accelerated evolution of corporate governance standards has prompted businesses to prioritise anti-corruption initiatives as part of their mechanisms for safeguarding their reputations and their holders’ rights. Their corporate controls address various ethics and fairness issues, and many views these measures as proof of following sound management practices ( Darwish et al., 2019 ). In recent years, the worldwide judicial battle against corruption has gathered traction. On June 24/2004, at the United Nations Global Compact Leaders’ Summit, it was reported that the UN Global Compact would also contain a tenth anti-corruption principle. The Principle states that “businesses can combat corruption in all manifestations, including extortion and bribery.” After lengthy consultations, all parties expressed overwhelming approval. Consequently, this sent a clear global signal that the private sector bears a significant share of the burden of eradicating corruption ( Caiden, 2013 ; Bardhan, 1997 ). Additionally, it showed a renewed commitment to the corporate sector to contribute to the battle against corruption.

5.2. Levels of Corruption

Following the 2003 invasion, countless grounds for misconduct arose with relative impunity. As seen in other conflict-torn territories, the aftermath of the 2003 intervention marked a massive infusion of tools for restoration and state-building, which was facilitated by removing foreign sanctions. This colossal influx has overloaded the Iraqi public sector’s spending and the capacity to foster accountability, which is already depleted and highly disorganized. This pattern was, however, not exclusive to Iraqis. American reconstruction efforts encountered significant oversight challenges as well. According to the US Special Inspector General for Iraq Reconstruction’s final study, 40% of the surveyed reconstruction projects have significant shortcomings, including overcharging by subcontractors, unaccounted expenses, duplication, and abuse.

Furthermore, in the US, a federal audit of nearly $6.6 billion in Iraqi reconstruction money found that Bureaucratic Corruption has become the central talking point within development agencies. The World Bank, for example, has found corruption to be the most critical challenge to economic and social growth. This means that corruption in state agencies is pronounced. According to Jane (2021), the misuse of funds can decimate many social growths. Methods of corruption such as bribery and embezzlement yield large amounts of money, but there is no likelihood of conviction. Ethical or unscrupulous conduct often flows from administration to administration. The 2011 World Transparency International Corruption Perception, Survey reveals that 56% admitted to paying a bribe in the past year. The evidence here of the three organizations that took the most bribes were the police, customs, and the justice system ( Maxime, 2013 ).

There is a common consensus that corruption is prevalent in Iraq, challenging the state’s attempts to build up. In the last decade, the nation’s corruption indices have also been deficient on several world indexes. According to the World Bank Enterprise report, corruption is a significant barrier for 62 percent of the businesses surveyed. In addition, 33.8% of businesses dealing with the public sector report needing a bribe. Eighty-nine per cent of companies in the District of Kerbela announced that they would send a contribution to “finish the work”. Seventy per cent of Baghdad-based companies reported that they had received bribe bids last year. The survey, which contains systematic bribery, fiscal evasion, and money laundering, indicates that, according to the estimates of the IMF and World Bank, roughly USD 65 billion in illicit funds left Iraq between 2001 and 2010, which accounted for about twice its 2005 GDP and 56 per cent of its 2012 GDP. An Iraq’s Highest Judicial Board investigation shows that the amount of motions of annual funds out of Iraq is far more significant, with money laundering schemes utilizing Central Bank practices projected at US$ 40 billion, which is a consequence of corruption. A prominent figure of illicit Funds from Iraq indicates that it was ranked ninth of the highest in the world in 2013.

5.3. Bureaucratic Corruption

Corruption has become the central talking point within development agencies. The World Bank, for example, has found corruption to be the most critical challenge to economic and social growth. This means that corruption in state agencies is pronounced. According to Jane (2021), the misuse of funds can decimate many social growths. Methods of corruption such as bribery and embezzlement yield large amounts of money, but there is no likelihood of conviction. Ethical or unscrupulous conduct often flows from administration to administration. The 2011 World Transparency International Corruption Perception, Survey reveals that 56% admitted to paying a bribe in the past year. The evidence here of the three organizations that took the most bribes were the police, customs, and the justice system. The Integrity Commission’s monthly surveys of government employees help to establish these numbers. During the same month in 2013, 3% of respondents.

Admitted having paid bribes in the last 30 days. The most often paid fees for identity documents are between 23% and 28% of consumers who admit to paying bribes at their local immigration offices. According to both sources, the primary motivation for bribing officials is to speed up the process. The survey revealed that the police (12% of respondents) was the most often targeted agency to bribe. This was closely followed by tax and property registration. This analysis indicates considerable geographical variations. In Baghdad, 22.9% of citizens confessed to paying bribes, while in the latter region of Kurdistan, 3.7% confessed to doing the same. A recent survey conducted by the World Bank (2019) showed that over 64% of the medium-sized firms in Iraq pay bribes to get a deal. Unusual amounts are observed in Basrah, which indicates that bribery is the standard in local procurement. Making a career in the public sector that pays hundreds or sometimes thousands of dollars a month is often tricky ( U 4 Expert Answer, 2011 ). There is enough evidence to show that corruption, regardless of rank, occurs at any level in the media and is noted in daily dealings with public sector officials ( Mansour, 2021 ). This study explores corruption from three different viewpoints and provides new knowledge about how corrupt the Iraqi government is and how successful the state’s “integrity regime” strategy is. They believe that corruption is prevalent in everyday life in Iraq and that more progress must expose the government to greater transparency ( Kolstad & Wiig 2009 ).

5.4. Bribery

When measuring corruption levels and patterns, ordinary citizens’ encounters with administrative bribery—the type of corruption that occurs from daily interactions between consumers of public facilities acting as bribe payers and civil servants acting as bribe-takers—provide various significant indicators ( OECD, 2010 ). Statistics show widespread bribery in the Iraqi public’s relationships, especially among civil servants. Managers and senior executives are more likely than other job types to be given bribes. People with supervisory responsibilities are more likely to be offered bribes than those without supervisory responsibilities. Participation in specific roles such as employment care, legal records, or delivering products and services to recipients in the external market, investment decisions, human resource administration, and internal review practices increases susceptibility to coercion ( UNODC, 2013 ). More precisely, nearly two-thirds (65%) of bribes are requested, either explicitly or indirectly, by the bribe’s civil servant.

On the other hand, the remaining 14% is demanded by a third party on the bribe taker’s behalf. Regarding the types of civil officials to which Iraqis most

Table 3. Samples of jobs that receive bribes at different scales.

often pay bribes, three stand out: nurses in public health services, public utility agents, and police officers, who account for a sizable portion of total bribes charged by locals. 19%, 15.50%, and 14.20% are the corresponding percentages.

5.5. Corruption and Integrity Challenges in the Public Sector of Iraq

Evaluating the extent and nature of their third-party connections while carrying out their assignments will be optimal to determine if civil servants are vulnerable to bribes. Bribing individuals or businesses with cash as service suppliers or customers is widespread. However, this is seldom given to public employees (15.6 per cent). Bribery is prevalent among government employees, especially those who provide services to the public, contractors, and government ministry (18.7% of all bribing follows bribery) (6.8 per cent). Regarding bribery, Iraq’s public sector is an open book. The Federal Commission (2020) on Integrity’s 2020 report cites an egregious official misconduct case in Iraq, which shows some unusual results. According to the report, three mayors, one Member of Parliament, and eight directors-general left the nation with smuggled public funds. There is evidence that reveals that official leaders are improperly selected and trained, and they are highly dishonest role models for others. Furthermore, it has been discovered that some politicians are named and recruited by religious government leaders, who then double as a protection for the dishonest.

5.6. Response to Corruption

While bribery surveys offer consistent examples of where anti-corruption activities should be centred inside the public sector, data on corruption approaches provide more compelling insight into combatting corruption. Findings reveal that 5% of civil servants are involved in bribe scams, which means fewer than one out of every twenty are reported to the authorities. In addition, less than one-third of those who attempted to provide payments to obtain more than 100 dollars in value were revealed through investigations. Nonetheless, more than half of those who attempted such things had little concern for those reporting to them or for t who reported 12 months of the analysis. It is critical to respect officials who are counteracting unethical or dishonest activities. Nevertheless, as opposed to the ones that have dropped since the beginning of the Iraq War, many assume that there is currently less regard for anti-corruption among people ( Razzante, 2019 ). However, given the Militia threats backed by conservative parties, this might not be a realistic option.

5.7. Corruption and the Protesters’ Demands

Iraqi citizens suffered enormously due to conflicts, insecurity, and inadequate resources after the US invasion. Iraq is complex due to the unstable political climate and the tensions between the groups. The deterioration of the economic condition and the embarrassment imposed on the community instilled fear in the youth, and a movement began to arise in October 2019. This revolt began on October 1 and lasted until April 2020, when COVID-19 ordered them to cease demonstrations ( New York Times, 2019 ). Religious rituals delayed the protests and the US drone assault on Suleiman. The uprising occurred due to inadequate facilities, inflation, and unemployment, as well as the perception among Iraqis that Iran and its proxy militias were draining the economy and destroying the region ( Dodge, 2019 ).

As a result, the requests made became recognizable as marches. Protesters demanded structural changes, employment creation and opportunity for young people, social justice, improved healthcare, a more transparent and accountable government, and an end to corruption. Additionally, demonstrators voiced their outrage at Iranian and other international meddling in Iraq. When the marches progressed, they made their requests. Initial calls for more effective and responsible government quickly evolved into calls for structural reform. These demands included the removal of the cabinet and fresh elections centred on a revamped electoral code, but also “full reform”, which included constitutional amendments and the abolition of Iraq’s post-2003 ethno-sectarian political structure dubbed as “Muhasasa”. Critics suggested that the scheme, which allocates jobs and wealth dependent on ethno-sectarian quotas, allows the national class to privilege themselves and their supporters at the cost of the general public. According to sources, the demonstrations were openly anti-sectarian, with a familiar slogan: “we want a homeland.”

5.8. Corruption in the Judicial System, Education, and Health

1) Judicial System

Judicial misconduct is the misappropriation of judicial funds and authority. This is seen when a judge employs family member to work in the court or manipulates court building and equipment contracts. This can sway any prosecution or legal settlement, as well as the execution or non-compliance of judicial rulings and sentences ( Danilet, 2009 ).

Judicial corruption may be described as any act that adversely affects judicial trials’ impartiality to achieve an illegitimate advantage for oneself or another party. There are two categories of such pernicious effects on the administration of justice. The first concerns undue pressures on the integrity of justice as a mechanism and the independence of judges, such as pressure factors influencing justice. It includes but is not limited to governmental interference in recruiting and hiring judges, detrimental effects on judges’ pay, and sway over the allocation of cases or judges to particular cases. The study of protections that address these factors and seek to preserve the system’s functional independence and the judge’s human independence (i.e., life tenure, the presence of a judicial board, etc.) is outside the reach of this article. The second category applies to justice system officials violating professional standards or “buying” their benevolence, which signifies a loss of dignity. In the news, there are genuine threats again he judges and assassination judges ( Alitthad Newspaper, 2011 ), which weakens the judiciary system.

2) Higher Education

The prevalence of invisible corruption in the higher education sector in Iraq is mostly attributed to the challenges associated with its detection.

The aforementioned statements seem to adhere to the prescribed rules, although they lack scientific and behavioural depth. This is due to its inherent attributes of time wastage and inefficiency. The study conducted by ( Al Saad & Mohsen, 2017 ) examines the concept within the context of laws and regulations. The proliferation of corruption is enabled by the adverse ramifications stemming from both the internal and external factors inside the higher education sector.

The rationale for its proliferation among students, academic institutions, and administrative bodies is that students and these institutions have similar interests. Thus, the conclusions are as follows: 1) the majority of corruption phenomena in Iraqi higher education are characterized by invisible corruption, 2) it is prevalent among those receiving assistance from higher education authorities, 3) this corruption is practised in higher education among students, staff, and teachers, and 4) corruption in Iraqi higher education is distinct from practice.

6. Governance Crisis

The report by O’Driscoll (2018) reflects that the costs of development projects were frequently grossly exaggerated for elites and their cronies to profit from them, and they were sometimes not even carried out. This is another source of manipulation and embezzlement, receiving pensions for fake persons. Over 70% of the budget is spent on operational aspects, such as hiring people not qualified for the job. Members of the government have sway over these bodies, which prevents them from addressing corruption within the government. Those accused of corruption are frequently targeted for political reasons rather than for corruption. On top of this, the judiciary’s lack of independence makes the situation even worse. One of the odd happenings in running the state of Iraq is finding a Prime minister whose political opponents were eliminated. Furthermore, he brought the high court, election commission, and central bank under his control. After that, he became the Minister of Defence, Minister of National Security, Minister of Interior, and the Armed Forces Commander in Chief. However, no such system has been adopted anywhere in the democratic world. International observations and many researchers have been unable to understand such governance. As a result of this chaotic governance, corruption was widely spread under his rule, and almost forty per cent of Iraqi territory fell into the hand of ISIS. The Iraqi people suffered immensely under his rule and the rule of other prime ministers since the invasion of Iraq. The absence of independent institutions to check on these powers and hold Maliki accountable contributed to his ability to Consolidate power, resulting in conflicts in all the statutes of society. Thus, the wrong type of government exists, which results in an ethno-sectarian division that further leads to conflict and the loss of its resources.

7. Discussions, Conclusions, and Findings

The economic environment in Iraq is suffering from many distortions, with corruption at the top of the Iraqi government’s challenges. Weak governance is the crucial reason for the bad management of the government administration (see Section 6). Political parties support political leaders and decision-making centres with different loyalties but no loyalty to Iraq. Most of these leaders have arms of military militias that interfere in state affairs. This creates chaos and loosens control over the country. During 2011-2020, the consecutive governments could not move the country forward. There are many shreds of evidence stated in this research that shows the country’s inferior management. Iraq is a failed state due to the corruption that raps the political system from election to public administration. The people of Iraq are frustrated, and the sectarian violence triggered by political leaders is one of the main reasons for all Iraqis’ problems. The decline of services and deficient job creation increased unemployment and poverty, besides the civil wars and weak governments. The interference of neighbouring countries, especially Iran, complicated the situation in Iraq. Iran has a global problem of terrorism and has ambitions to restore the Persian empire. This created conflicts in Iraq and other countries in the Arab peninsula. Iraq is at the centre of this conflict and is suffering the most. All this created an unbearable situation for Iraqis, while corrupted political enlists ran the country with no hope for development. One of the main reasons for this helpless case is the loss of professional elites who have been running the country for decades before 2003. Killing elites and displacing thousands of them created a huge gap. The country will not be able to stand again for years to come. All the above-discussed issues contributed to corruption, and the government stands disabled to act against the corrupt factions supported by political parties. From the discussion, it is clear that there are kleptocrats (which means “thief”, “I steal”, and “power” rule).

This is a government whose dishonest leaders practice political control to steal their nation’s wealth by embezzling government funds. Furthermore, evidence of the everyday occurrences of bribers is prevalent, which shakes civil society and prevents system and public administration. Reports show that this is happening due to the management system bottleneck and corrupt officials, as indicated by Iraqi official reports. Another worrying issue is the dishonest intentions of officials to remedy this situation, as the Iraqi people are not satisfied, which is witnessed in the continuous demonstrations. Even the whitepaper found partial solutions due to the challenges the parallel militias stage encountered. There are severe solutions for introducing the government in association with the repair of the financial systems. There is a need for a fundamental revision of the Iraqi constitution produced during the early years of occupation, which triggered many problems in Iraq.

Corruption as a phenomenon is not isolated from other issues facing Iraq. One of the solutions is to establish e-government to stop bribery and increase civil administration efficiency. Here, we face other problems related to the stability of electricity systems; if electricity is not stable, then the Internet and all its related functions will not be operational. Many countries established e governments, and they were very successful. There must be a serious plan to re-consider the militias issue; this is a primary obstacle against building a free democratic Iraq. The other issue is poor governance in most public civil institutions; as explained earlier in this paper, the case of a prime minister holding many positions leads to corruption and the state’s failure.

Furthermore, unemployment is a prodigious threat to the economy. Corruption in Iraq reduces the value of public investment and discourages private physical and human capital investment; as a result, growth will diminish gradually, and the unfortunate result is that unemployment will continue. On the ground in October 2020, we found a frustrating youth uprising that took to the streets and squares expressing their discontent and exposing their lives to danger-nearly 700 Hundred were killed and thousands injured, asking for political reform, a free country, fairness, services, and jobs.

Conflicts of Interest

The authors declare no conflicts of interest.


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