Government Unstuck: How Iraq Can Win Back Its Citizens’ Trust by Simplifying the State

A large state, a thin layer of trust

Trust in government is not bought with salaries. It is built when citizens feel their voice changes decisions, and when a transaction takes a day rather than a year. That is what Iraq lacks today.

In the Arab Barometer survey of summer 2024, only 34% of Iraqis said they trust the government, 21% trust parliament and 36% are satisfied with healthcare (Arab Barometer). That is despite a noticeable improvement since 2022.

Meanwhile the state machine has swelled. According to budget-law figures compiled by the Rudaw Research Center, the number of civil servants reached about 4.07 million, up from 3.03 million in 2015. Spending on salaries exceeded IQD 60 trillion in 2024 — roughly $39.5bn at the current official rate of IQD 1,520 per dollar (Rudaw Research Center).

The equation is upside down: more employees, less trust, longer transactions. Opening a factory in Iraq takes about two years, and an investment licence can take four. A new OECD report asks the question Iraq needs to answer: how does a state get unstuck?

Diagnosis: three loops that feed the paralysis

Iraq’s administrative paralysis is less a shortage of laws than a closed loop of three mutually reinforcing failures.

Loop one: procedures without legal basis. Much of the burden on citizens is imposed not by law but by accumulated administrative “custom”. The OECD calls this “beige tape”: the burden governments impose on themselves through internal rules whose costs pile up.

Loop two: a gap between decision and implementation. Laws look good on paper, but citizens meet something else at the counter. Every decision not implemented as announced draws down trust, so investors hesitate and citizens turn to personal connections instead of the system.

Loop three: decisions made without those they affect. When decisions are issued without consulting specialists and affected sectors, side effects surface after implementation and the decision is amended or reversed. That volatility becomes a new source of uncertainty.

The economic cost is direct. Time lost in queues raises compliance costs, long licensing delays postpone investment and jobs, and paper-based transactions widen the space for corruption. The result is a private sector that does not grow, pushing young people toward public jobs — and the state swells further.

What the world says: trust starts with having a say

The OECD’s Government Unstuck (2026) describes many governments as “stuck”: the world is changing faster than their institutions, and citizens notice the gap. It traces low trust to two factors: people’s sense that they lack influence over decisions, and weak confidence in government’s ability to tackle complex problems (OECD, Government Unstuck, p. 9).

The report’s numbers are striking:

• The gap in trust between those who feel they have a say and those who do not is 47 percentage points — one of the strongest drivers of trust (p. 22).
• Only 39% believe that taking part in a public consultation influences government decisions (p. 22).
• Half of civil servants say rules and procedures hinder effective work, and officials in 72% of countries consider regulation and bureaucracy excessive (p. 13).
• Most countries have adopted the “once-only” principle — never asking citizens for a document the state already holds — but few have made it an operational reality (p. 14).

The report sets four objectives: a renewed relationship in which citizens shape policy beyond the ballot box; radically simplified government and regulation; restored room for manoeuvre in public finances; and a proactive, data-driven government (p. 9). It proposes concrete tools, including sunset clauses that force periodic review of rules, because 54% of countries cite internal resistance and risk aversion as barriers to simplification (p. 31).

It also sees a rare window: AI can automate routine tasks and flag overlapping rules, yet only 18% of countries deploy such tools systematically (p. 28).

Among leading economists, Lant Pritchett and Matt Andrews of Harvard and Michael Woolcock of the World Bank call this pattern “isomorphic mimicry”. States import the forms of reform — laws and structures — while actual practice stays the same, and they fall into a “capability trap” (Harvard CID, 2012). Their way out is to start from specific local problems, experiment step by step with rapid feedback, and involve those affected.

The consultancies’ reading: from reform as an event to adaptation as a system

Deloitte reaches the same conclusion from an operational angle. Its Government Trends 2026, published in its Middle East insights, argues that governments are being redesigned, not merely modernised: a shift from “reform as an event” to “adaptation as a system”, and from siloed programmes to shared platforms (Deloitte, Government Trends 2026).

Three of its eight trends bear directly on Iraq:

• Rewiring regulation: from static rulebooks to adaptive, data-driven oversight.
• The procurement reset: redesigning public procurement around a simplicity-first mindset.
• Services customised for citizens: using AI to deliver more responsive services.

The shared message from the OECD and Deloitte is clear: simplification is not a one-off campaign but a permanent system of review and measurement. Digitising complicated procedures only produces digital bureaucracy.

The Iraqi view: the problem is implementation, not the text

In the view of Mr. Khaled Al-Jabri, President of the Osoul Foundation for Economic Development and Sustainable Development, Iraq’s trust index is “very low” because most decisions, once implemented, look very different from the decision itself. The business-confidence index falls with it. No investor, he argues, can be attracted when a licence takes two or three years — numbers that are “unacceptable” in the age of artificial intelligence.

This echoes Pritchett’s “isomorphic mimicry”. Al-Jabri stated that Iraq’s investment law is “good” in its articles and that the problem lies in its application: the one-stop shop was created to shorten licensing, yet it drags on for years through multiple stages where corruption can creep in. A licence should be granted within one or two weeks or a month, and the investor then held to the declared timeline.

His positions map onto the OECD’s four objectives one by one:

• Radical simplification = abolishing “custom”. Al-Jabri describes a “bureaucratic habit” of procedures with no legal basis, such as demanding a residence card to renew the national ID. Whatever lacks a legislative basis, he says, should be abolished to ease the burden on citizens. This is exactly what the OECD calls beige tape.
• A voice in decisions = study before issuing. On the decision to route property sales through banks, Al-Jabri noted that property registration itself takes only minutes, while delays occur in municipal and tax offices — and the decision added a third link, the banks, even though trust between citizens and the banking system is “almost non-existent”. The decision, in his view, would have served its purpose had it been properly studied and had specialists and sector bodies been consulted.
• Digital government = automating the whole procedure and aligning the laws. Al-Jabri points out that automation today is partial, and that the 2012 electronic signature law clashes with accounting-documentation laws requiring handwritten, stamped receipts. He estimates that reconciling them would solve more than 80% of the problem, and says reviewing laws for the digital transition is parliament’s job.
• Trust is built by experience. Al-Jabri observes that mandatory electronic payment in tax offices and professional-registration departments pushed the private sector to open bank accounts to pay fees — a “promising” start, though it does not yet cover everything.

Where does Al-Jabri add an Iraqi specificity? In two places. First, the Iraqi knot is legal before it is technical: old laws do not recognise electronic documents. Second, simplification can begin with what needs no legislation at all — scrapping whatever has no basis in law.

From the field: the wall of change

The flaws in Iraq’s administration have been diagnosed in many reports, but any reform programme without a mindset that accepts reform will hit a “wall of change”. The problem is not accepting new laws but discarding old laws and old customs, along with centralisation, overlapping mandates and “pen and paper”. The relationship between taxpayer and state should be a partnership, not mutual distrust — as guest Qutaiba Zaki, Senior Manager at Deloitte Middle East – Iraq, said in the episode “السياسات الضريبية في العراق بين التعقيد والرقمنة!” (Tax Policy in Iraq: Between Complexity and Digitisation!) of the Seed | Nmw podcast, stressing that he was speaking in a personal capacity. He added that e-invoicing linked to banks, customs and the tax authority, as in Egypt and Saudi Arabia, is the way out of a cash economy, and that there is no solution other than a digital economy and automation.

His observation confirms what Pritchett and his colleagues concluded: reform succeeds not by importing texts but by changing how work is done inside the office.

Recommendations: six steps toward an unstuck Iraqi government

1. Inventory “custom” and scrap what has no legal basis (Council of Ministers Secretariat with every ministry): publish a list of every document demanded from citizens alongside its legal basis. Anything without one is abolished by administrative order, without waiting for legislation.
2. The once-only principle (Ministry of Planning and data-holding agencies): no office may demand a document another office already holds, starting with the national ID, residence card and property register.
3. Align the laws with electronic documents (Council of Representatives): a single amendment recognising electronic receipts and signatures across all old accounting-documentation laws, followed by full rather than partial automation.
4. Binding maximum processing times (investment commissions, municipalities and tax offices): investment licences within weeks, not years, with a monthly published indicator of actual completion times in each office.
5. Sunset clauses for instructions (Council of Ministers): every new instruction lapses automatically after a set period unless its value is proven, as the OECD recommends.
6. Mandatory consultation before economic decisions (government and Central Bank): publish the draft decision, its impact assessment and a comment period for the private sector and specialists, then respond publicly on what was accepted and what was not. That is how citizens come to feel their voice changes decisions.

Conclusion

Iraq does not need a bigger state; it needs a simpler, faster and more attentive one. Four million civil servants cannot buy trust, but a transaction completed in a day and a decision taken after consulting those it affects can.

The opportunity is there: AI is lowering the cost of automation, and fiscal pressure makes efficiency a necessity rather than a choice. The first step needs no new law — only the courage to scrap what has no basis in law.

Sources

• OECD (2026) — Government Unstuck: The Next Frontier of Government Transformation
• Arab Barometer (2024) — Amid Persistent Challenges, Iraqis Express Cautious Optimism in Latest Survey
• Rudaw Research Center (2025) — Expansion of Iraq’s public sector: how many new civil servants were appointed last year
• Matt Andrews, Lant Pritchett & Michael Woolcock, Harvard CID (2012) — Escaping Capability Traps through Problem Driven Iterative Adaptation (PDIA)
• Deloitte Middle East (2026) — Government Trends 2026: The future of government is now