Since its establishment, the Iraqi state has witnessed the dominance of strict centralized policies in managing revenues and wealth, which historically led to the marginalization of local entities in favor of strengthening the central authority's grip. Despite the democratic and constitutional transition, prevailing financial thinking still leans towards centralization, resulting in the squandering of resources, poor sustainable development, and the depletion of infrastructure. Analysts point out that the Iraqi constitution clearly mandates a federal system based on fair contractual partnership and the voluntary contribution of regions to fund the federal state, contrary to the current practice that restricts provincial revenues and dispenses them as conditional funding. Experts affirm that achieving development and building strong institutions requires abandoning the centralized mindset and fully committing to the essence of fiscal federalism.