Abstarct: Institutions play a fundamental role in shaping the trajectory of economic development by establishing the rules and frxameworks that govern economic interactions. The primary objective of this study is to examine the impact of institutional indicators on the process of economic development in Iraq. Six institutional dimensions—governance quality, control of corruption, government effectiveness, rule of law, political stability, and regulatory quality—were considered as independent variables. The process of economic development was measured through four key dimensions: economic growth, investment, productivity, and employment. The study employs a quantitative approach baxsed on econometric analysis of annual time-series data for Iraq over the selected period. After conducting unit root tests and diagnostic tests to verify the classical regression assumptions, four separate regression models were estimated to evaluate the impact of institutional indicators on each dimension of economic development. Additional diagnostic tests, including Breusch–Godfrey, White, Jarque–Bera, and Variance Inflation Factor (VIF), were performed to assess model validity. The empirical findings indicate that political stability is the only institutional variable that consistently exhibits a positive and statistically significant effect on economic growth, productivity, and employment. In contrast, other institutional indicators—governance quality, control of corruption, government effectiveness, rule of law, and regulatory quality—do not show a statistically significant direct effect on the selected development indicators within the estimated models. Furthermore, investment in Iraq appears to be less directly influenced by institutional quality and more strongly affected by structural characteristics of the oil-dependent economy. Overall, the results suggest that in the Iraqi context, political stability serves as a prerequisite for improving economic performance. Institutional reforms in other dimensions may yield limited short-term effects unless accompanied by sustained political stability. These findings provide important policy implications for designing development strategies focused on strengthening institutional stability and reducing political uncertainty in Iraq.