Work

Institutional Quality and Economic Diversification Enhance Macroeconomic Resilience: Evidence from Iraq

Year: 2026

Type: article

Abstract: This study investigates the effects of institutional quality and economic diversification on macroeconomic resilience in Iraq during 1996–2025. A Composite Macroeconomic Resilience Index (CMRI) was constructed using Principal Component Analysis, while institutional quality and economic diversification were measured using composite governance and Herfindahl–Hirschman indices. The analysis employed Quantile Regression, Bayesian Regression, NARDL, Toda–Yamamoto causality, and FMOLS. The results consistently identify institutional quality as the principal determinant of macroeconomic resilience. Economic diversification exhibits a predominantly negative long-run association across the estimation frameworks, indicating that diversification has not yet generated sufficient structural transformation to reduce oil dependence. Overall, the findings highlight that strengthening institutional quality is essential for achieving sustainable macroeconomic resilience in Iraq.

Source: Economies

DOI: 10.3390/economies14090366

Authors: Wafi Salam Sulaiman Al-Suwaidi, Ghaidaa Mohammed Nafea Shaheen, Rana Nizar Younis, Saif Al-Din Muhanad Abdul Qadir, Mishaal Tahseen Salim Al-Jarba

Institutions: Ministry of Education, University of Mosul, Northern Technical University

Language: English

Topic: Natural Resources and Economic Development

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $2,172