Explanation of Rent- Producing channels in the Banking System in Iran using the Institutional Political Economy Approach

Document Type : Research Article

Authors

1 Faculty Member of Faculty of Economics, University of Tehran

2 Faculty member of faculty of Economics, Allameh Tabatabaee University

3 Faculty of Economics of Tehran University

Abstract

The main issue of the present article is the identification of rent producing channels in the banking system of Iran. Institutionalist political economy approach is used as the theoretical framework due to the nature of the rent-seeking and, consequently, to the inclusion and interaction of the economic and political variables. In the theoretical part, ownership and regulation system have been introduced as two major channels of rent producing in the banking system. Subsequently, in the experimental part, using the library method and content analysis, for 2005-2015, the performance of the banking system was examined with regard to the above channels and it is shown that although private ownership is a rent producing channel in the banking system in Iran, but the regulation system is more important than that. In this regard, one of the powerful evidences which provides the conditions for producing and expansion of rents is a violation of the “interest- free banking operation” law. Investigating variables such as lending facilities, non-performing loans and the quality of the banking system in relation to productive sectors also indicate that the rule of law in Iran, in the formulation of laws and regulations, as well as the implementation and supervision, has a significant role in supporting this issue. Therefore fundamental reform of regulation system, especially in the implementation and supervision phase, and necessity of institutional reform of the country's economic requirements with the goals of protecting private property and increasing social and economic well-being can modify even the ownership channel to reduce significantly the rent-seeking behavior.

Keywords

References

چهاربند، فرزانه (1396). تبیین مجاری تولید رانت در عملکرد نظام بانکی ایران با رویکرد اقتصاد سیاسی، رساله دکتری، دانشکده اقتصاد دانشگاه تهران.
رحمانی، تیمور و گلستانی، ماندانا (1388). «تحلیلی از نفرین منابع نفتی و رانت­جویی بر توزیع درآمد در کشور‌های منتخب نفت­خیز»، تحقیقات اقتصادی، 44(4)، 86-57.
مهرآرا، محسن؛ ابریشمی، حمید ‌و زمان­زاده نصرآبادی، حمید (1389). «مصیبت منابع یا نهاد‌ها؟ مطالعه موردی کشور‌های صادرکننده نفت»، مجله پژوهشنامه اقتصادی، 10(3)، 233-205.
زنوز، ‌هادی و برمکی، بهروز (1394). ارزیابی سیاست‌های پولی و نظام بانکی در ایران، اتاق بازرگانی، صنایع، معادن و کشاورزی خراسان رضوی.
Acemoglu, D. and James, R. (2001). The Role of Institutions in Growth and Development, The International Bank for Reconstruction and Development, The World Bank On behalf of the Commission on Growth and Development.
Andrianova, S., Panicos, D., Anja, Sh. (2008). “Government Ownership of Banks, Institutions and Financial Development”, Journal of Development Economics, Vol 85, Issue1-2, 218-252.
Baumol, W. (1990). “Entrepreneurship: Productive, Unproductive, and Destructive”, The Journal of Political Economy, Vol. 98, No. 5, 893-921.
Braun, M. and Claudio, R. (2010). Banking on Politics: When Former High-ranking Politicians Become Bank Directors, The World Bank Economic Review Advance Access published June 23.
Commons, J. (1934). Institutional Economics: Its Place in Political economy, New York: Macmillan.
Dink, S. (2005). “Politicians and Banks: Political influences on government-owned banks in emerging countries”, Journal of financial economics, Vol 77, issue 2, 453-479.
Douhan, R., Magnus, H. (2008). Productive and Destructive Entrepreneurship in a Politacal Economy Framework, Research Institute of Industrial Economics, Stockholm, Sweden.
Drazen, A. (2000). Political Economy in Macroeconomics, published by Princeton University Press and copyrighted.
Faccio, M., Ronald, M., John, M. (2006). “Political Connections and Corporate Bailouts”, Journal of Finance, Vol. 61, No. 6, 2597-2635.
Hardy, D. (2006). Regulatory Capture in Banking, IMF Working Paper.
Igan, D., Prachi, M., Thierry, T. (2009). A Fistful of Dollars: Lobbying and the Financial Crisis, IMF Working Paper.
Khwaja, A., Atif, M. (2005). “Do lenders favor politically connected firms?”, Quarterly Journal of Economics, Vol. 120, Issue 4, 1371-1411.
Kroszner, R. (1997). On the Political Economy of Banking and Financial Regulatory Reform in Emerging Markets, Prepared for the Building Better banking seminar for the Annual Meeting of the Board of Governors of the world Bank Group and the International Monetary Fund, Hong Kong, September 21, 1997.
La Porta, R., Lopez-de-Silanes, F., Zamarripa, G. (2003). “Related lending”, Quarterly Journal of Economics, Vol. 118, Issue 1, 231-268.
La Porta, R., Lopez-De-Silanes, F.,  Andrei, Sh. (2002). “Government Ownership of Banks”, The Journal of Finance, Vol 57, Issue 1, 265-301.
Lucca, D., Amit, S. and Francesco, T. (2014). The revolving door and worker flows in banking regulation, Working Paper 20241, National Bureau of Economic Research, Cambridge.
Mehlum, H., Karl, M. and Ragnar, T. (2005). Cursed by Resources or Institutions?, Norwegian University of Science and Technology.
Moe, T. (1990). “Political Institutions: The Neglected Side of the Story”, Journal of Law, Economics, & Organization, Vol. 6, 213-253, Special Issue: [Papers from the Organization of Political Institutions Conference, April 1990].
Nissen, A., Ruenzi, S. (2009). Political connectedness and firm performance: Evidence from Germany, CFR working paper, University of Cologne, Center for financial research.
North, D. (1990). Institutions, Institutional Change and Economic Performance, Cambridge University Press.
Perotti, E. (2001). “Lessons from the Russian Meltdown: The Economics of Soft Legal Constraints”, Journal of International Finance, Vol 5, Issue 3, 359-399.
Robinson, J., Ragnar, T., Thierry, V. (2006). “Political foundations of the resource curse”, Journal of Development Economics, Vol 79, 447-468.
Schumpeter, J.A. (1934). The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Cambridge (Mass.): Harvard University Press.
Schumpeter, J.A. (1950), Capitalism, Socialism and Democracy, 3d ed. New York.
Sharpe, S. (1990), “Asymmetric Information, Bank Lending and Implicit Contracts: A stylized Model of Customer Relationships”, The Journal of Finance, Vol. 45, No. 4, 1069-1087.
Stiglitz, J. and Andrew, W. (1981). “Credit rationing in markets with imperfect information”, The American Economic Review, Vol. 71, No. 3, 393-410.
Stigler, G. (1971). “The Theory of Economic Regulation”, The Bell Journal of Economics, Vol. 2, Issue 1, 3-21.
Tan, J. (2008). Privatization in Malaysia: regulation, rent-seeking, and policy failure, published in the Taylor & Francis e-Library.
منابع اینترنتی:
www.amar.org.ir، نتایج سرشماری سال‌های 1385 و 1390.
www.cbi.ir، قوانین و مقررات، مصوبات شورای پول و اعتبار.
www.cbi.ir، نشریه‌ی گزیده‌ی آمار‌های اقتصادی (سال‌های مختلف).
www.cbi.ir، حساب‌های ملی بانک مرکزی.
سبحانی حسن (1394). دادنامه نظام پولی و بانکی کشور، www.hasansobhani.ir.
Journal of Applied Economics Studies in Iran
Volume 7, Issue 28
January 2019
Pages 251-275

Files

Share

How to cite

Statistics