An Institutional Approach to the Inefficiency in Economic Performance

Name: An Institutional Approach to the Inefficiency in Economic Performance
Author: Ali Sarzaiem

İsim	An Institutional Approach to the Inefficiency in Economic Performance
Yazar	Ali Sarzaiem
Konu	ineffectiveness, institutionalism, political economy
Tür	Belge
Dil	Belirlenmemiş dil
Dijital	Evet
Yazma	Hayır
Kütüphane:	Belfast Kraliçe Üniversitesi Kütüphaneleri
Demirbaş Numarası	ISSN: 2476-2806, EISSN: 2476-6828, DOI: 10.22054/tssq.2022.70365.1338
Kayıt Numarası	cdi_doaj_primary_oai_doaj_org_article_5787c6eead004ad98d9fb2e5801f0ba6
Açıklama	Iran's economy has not experienced high growth rate during past decades despite huge revenue from oil export. This shows ineffectiveness of resource allocation in Iran economy. The cause of such a resource mis-allocation has been disputed by different theories. In this paper, a political economy approach is used to explain such an inefficiency and it will be shown that it provides a better and more comprehensive approach in compare to the rival explanations. The core idea of the paper is that institutional arrangement in the pollical system evolved after Iran revolution from one hand and the quality of institutions on the other hand leads to high social discount rate which dominates short-termism to long-termism. From institutional point of view, high quality institution helps to relax some political economy constraints and provide incentives for economic agents to follow long-term benefits rather than short term one. In the absence of high-quality institutions, supporters of the status-quo allocation prevail the forces who support reallocation to achieve optimal allocation. As a result, transition from current negative equilibrium to superior one is blocked. In another word, economic reform requires high-quality institutions which support reallocation of available resources. Otherwise, different political economy constraints prevent to prioritize superior allocation to inferior one.
Şuna bir parçasıdır	Faṣlnāmah-i dawlatʹpizhūhī, 1401-08, Vol.8 (31), p.145-165
Kaynak	DOAJ Directory of Open Access Journals

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An Institutional Approach to the Inefficiency in Economic Performance

Yazar Ali Sarzaiem

Konu ineffectiveness, institutionalism, political economy

Tür Belge

Dil Belirlenmemiş dil

Dijital Evet

Yazma Hayır

Kütüphane Belfast Kraliçe Üniversitesi Kütüphaneleri

Demirbaş Numarası ISSN: 2476-2806, EISSN: 2476-6828, DOI: 10.22054/tssq.2022.70365.1338

Kayıt Numarası cdi_doaj_primary_oai_doaj_org_article_5787c6eead004ad98d9fb2e5801f0ba6

Açıklama Iran's economy has not experienced high growth rate during past decades despite huge revenue from oil export. This shows ineffectiveness of resource allocation in Iran economy. The cause of such a resource mis-allocation has been disputed by different theories. In this paper, a political economy approach is used to explain such an inefficiency and it will be shown that it provides a better and more comprehensive approach in compare to the rival explanations. The core idea of the paper is that institutional arrangement in the pollical system evolved after Iran revolution from one hand and the quality of institutions on the other hand leads to high social discount rate which dominates short-termism to long-termism. From institutional point of view, high quality institution helps to relax some political economy constraints and provide incentives for economic agents to follow long-term benefits rather than short term one. In the absence of high-quality institutions, supporters of the status-quo allocation prevail the forces who support reallocation to achieve optimal allocation. As a result, transition from current negative equilibrium to superior one is blocked. In another word, economic reform requires high-quality institutions which support reallocation of available resources. Otherwise, different political economy constraints prevent to prioritize superior allocation to inferior one.

Şuna bir parçasıdır Faṣlnāmah-i dawlatʹpizhūhī, 1401-08, Vol.8 (31), p.145-165

Kaynak DOAJ Directory of Open Access Journals