Digital transformation of public finance and its impact on spending efficiency to achieve the Sustainable Development Goals

<ns5:p>Background Digital transformation of public finance is a fundamental pillar for achieving modern and effective public financial management. By enhancing transparency, reducing waste, and improving efficiency in the allocation and use of public resources, digital transformation directly contributes to raising the level of efficiency of public spending. This efficiency, in turn, is a vital factor in countries' ability to finance and achieve the Sustainable Development Goals, which positively impacts the long-term well-being and sustainability of societies. The research includes an economic analysis of the relationship between the digital transformation of public finances and spending efficiency to achieve sustainable development goals, with a focus on the Iraqi economy during the period 2007-2023. Methodology Using a quantitative analytical approach based on the automatic regression distributed lag model (ARDL) and boundary testing for cointegration, this research provides an empirical assessment. The research variables used were: fiscal depth (broad money supply as a percentage of GDP) as an independent variable (FD), per capita education spending (SE) as a dependent variable, and per capita health spending (HS) as a dependent variable. The most important conclusions were reached through automatic regression analysis of late distributions (ARDL). Results The results indicate a statistically significant positive impact of digital transformation on spending efficiency in the short term. However, the boundary test did not demonstrate a strong and stable long-term cointegration relationship, suggesting that the full benefits and structural stability of financial deepening have not been fully realized. The analysis highlights the limited explanatory power of fiscal deepening (FD) on health spending, especially in the long term, demonstrating a dynamic relationship between short-term variables. Conclusions These findings contribute to policy recommendations urging the Iraqi government to develop clear roadmaps for implementation and address skills gaps in infrastructure and workforce to ensure the sustainability of digital reforms.</ns5:p>