The multiple aspects of economic shocks lead to the process of draining the economic resources available to countries, particularly those with Rent Economy, which are the most politically, economically, and socially vulnerable economies, sometimes generating large fiscal deficits or intensifying public debt and major concerns about oil revenue collection; This requires moving towards the rationalization and control of expenditure through transparent, credible and viable fiscal policies. The research aims to show what the rules of fiscal discipline are and how they can be employed to achieve fiscal discipline in Rent Economy countries, that experience double shocks. The research may conclude that the application of the financial rules would address the double shock, as well as the challenges facing Iraq’s fiscal policy.
Rent economies, including Iraq, are easily exposed to external shocks; This is because there is a single commodity on the export side, with a plethora of imported goods that drain large funds to fill the shortfall in the delivery of various goods and services (both consumable and productive).
The concept of fiscal discipline is the ability of the Government to maintain smooth fiscal operations and to ensure long-term fiscal safety and prosperity, a versatile perspective on maintaining the fiscal position during shocks, as a measure of fiscal policy’s ability to curb overspending, and hence fiscal deficits.
