<![CDATA[General Background: The Iraqi economy relies heavily on volatile oil revenues, leading to significant fluctuations in public fiscal management. Specific Background: Public budget management is intrinsically linked to the provision of essential Human Development Services, including social welfare, education, and health. Knowledge Gap: Despite the critical role of these services, the dynamic relationship between fiscal deficits and the provision of social and personal services remains insufficiently quantified in the Iraqi context. Aims: This research measures the impact of budget deficits on Human Development Services in Iraq using the Autoregressive Distributed Lag (ARDL) model for the period 2004–2022. Results: Findings reveal a significant inverse relationship; a one-billion-dinar increase in the fiscal deficit causes a long-term reduction of approximately 0.38 billion dinars in service production due to project delays and suspended support programs. Novelty: The study provides a precise empirical model quantifying the fiscal-social trade-off in a rentier economy, highlighting the slow 11% annual corrective response of social infrastructure to financial shocks. Implications: Policymakers must prioritize funding for vital health and education sectors and diversify revenue streams to decouple human development from oil-price-induced fiscal instability, thereby ensuring financial sustainability. Highlights: Fiscal deficits trigger immediate project suspensions and reduced maintenance in vital social infrastructure. The service sector exhibits a sluggish recovery mechanism, requiring nearly a decade to fully correct short-term financial imbalances. Over-reliance on extractive industry revenues creates structural vulnerability, hindering long-term social welfare stability. Keywords: Budget Deficit; Fiscal Policy; Human Development Services; Iraqi Economy; ARDL Model]]>
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