Effectiveness of Institutional Guarantees in the Allocation of Public Funds: A Comparative Legal Analysis of Governance and Political Structures in Iraq and Lebanon

Abstract

Institutional guarantees are essential to ensuring that public funds are allocated and managed in accordance with the purposes established by law. This comparative legal study examines two distinct mechanisms for managing resource-related public revenues: the Regional Development Account in Iraq and the Lebanese Sovereign Wealth Fund. Although the Iraqi mechanism is embedded in annual budget legislation and the decentralized development framework, the Lebanese model is established by a dedicated statutory regime for the management and investment of future petroleum revenues. The study asks whether the effectiveness of these arrangements depends primarily on the constitutional and political structure of the state or, instead, on the quality of legal design, governance, transparency, institutional independence, and oversight. A comparative doctrinal and analytical method is used to examine constitutional provisions, budget and public-finance legislation, petroleum legislation, sovereign-wealth-fund rules, governance standards, transparency requirements, and selected international benchmarks, including the Santiago Principles and the Truman framework. The analysis shows that the Iraqi Regional Development Account is operational but remains closely dependent on annual budget appropriations, volatile oil revenues, central transfers, implementation capacity, and political bargaining. Lebanon, by contrast, has adopted a comparatively specialized legal framework through Law No. 320 of 2023, but the practical operation of the Sovereign Wealth Fund remains contingent on the realization of petroleum revenues and on effective implementation of the statutory governance and transparency safeguards. The comparison indicates that neither federalism nor centralization by itself determines the quality of public-fund allocation. Institutional effectiveness depends more directly on legal clarity, stable funding rules, operational independence, transparent disclosure, effective audit and accountability, and protection against diversion of allocated funds from their legally defined purposes. The study concludes that both models require stronger institutional safeguards, although the nature of the required reforms differs because one mechanism is already embedded in recurrent public expenditure while the other is principally a forward-looking framework for future resource revenues.