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
Basım Yeri	Allameh Tabataba'i University Press - Allameh Tabataba'i University Press
Konu	Economics
Tür	Süreli Yayın
Dil	Farsça
Dijital	Evet
Yazma	Hayır
Kütüphane:	Northwestern Üniversitesi Kütüphaneleri
Kayıt Numarası	cdi_doaj_primary_oai_doaj_org_article_5787c6eead004ad98d9fb2e5801f0ba6
Lokasyon	Check request options
Notlar	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.

Kaynağa git Northwestern Üniversitesi Kütüphaneleri Northwestern University Libraries

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Northwestern Üniversitesi Kütüphaneleri

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An Institutional Approach to the Inefficiency in Economic Performance

Yazar Ali Sarzaiem

Basım Yeri Allameh Tabataba'i University Press - Allameh Tabataba'i University Press

Konu Economics

Tür Süreli Yayın

Dil Farsça

Dijital Evet

Yazma Hayır

Kütüphane Northwestern Üniversitesi Kütüphaneleri

Kayıt Numarası cdi_doaj_primary_oai_doaj_org_article_5787c6eead004ad98d9fb2e5801f0ba6

Lokasyon Check request options

Notlar 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.

An Institutional Approach to the Inefficiency in Economic Performance

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