Iraq sets up commission to shift toward performance-based budgeting

BAGHDAD, Iraq — The Iraqi government has established a commission to prepare the country for a transition to performance- and program-based budgeting, the prime minister's financial advisor, Mazhar Mohammed Salih, said on Monday. The shift, he told the Iraqi state news agency, represents a modern public-finance approach that moves from spending discipline to spending evaluation. Salih said spending is the most critical part of the budget. While the traditional line-item structure will remain the foundation, expenditures under the program-based system will be tied to defined programs with measurable objectives. Using anti-poverty programs as an example, he explained that when initiatives involve more than one ministry, performance assessments begin once results are achieved, and spending is reviewed to determine whether it met its targets. Under the current line-item model, he added, audits focus on whether outlays complied with regulations. The program-based approach, by contrast, also analyzes deviations and efficiency through administrative evaluation, a method that requires more cost-accounting specialists. Salih said the Ministry of Higher Education had been advised to expand cost-accounting departments, but the results have not met expectations. Salih said the transition requires a centralized decision-making authority, support from the Council of Ministers and coordinated work between the finance and planning ministries. He noted that Egypt spent ten years reaching the same stage, while Jordan built a hybrid model combining its old line-item system with program-based budgeting.