Author
Ali Sarzaiem
Publication Date
1401
Publication Place
Allameh Tabataba'i University Press -
Allameh Tabataba'i University Press
Subject
ineffectiveness, institutionalism, political economy
Type
Periodical
Language
Arabic
Digital
Yes
Manuscript
No
Library
Universitat de Girona
Library Asset ID
ISSN: 2476-2806, EISSN: 2476-6828, DOI: 10.22054/tssq.2022.70365.1338
Record ID
cdi_doaj_primary_oai_doaj_org_article_5787c6eead004ad98d9fb2e5801f0ba6
Library Location
Available Online
Date
1401
Sample Text
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.
