Investigating the effect of financial decentralization on the misery index with spatial measurement approach (Iranian provinces)

Document Type : Research Article

Authors

1 Ph.D. Student in Public Sector Economics, Faculty of Management and Economics, Lorestan University, Lorestan, Iran

2 lorestanAssociate Professor of Economics, Faculty of Management and Economics, Lorestan University, Lorestan, Iran

3 Assistant Professor of Economics, Faculty of Economics, Kharazmi University, Tehran, Iran

4 Assistant Professor of Economics, Faculty of Management and Economics, Lorestan University, Lorestan, Iran

Abstract

The purpose of this article is to investigate the effects of financial decentralization on the misery index for the Iranian economy. For this purpose, in the form of a spatial econometric model, the data related to the Okan misery index (as a combined index of inflation and unemployment) for the provinces of the country during the period 2006-2016 have been used. The results of model evaluation show that the effect of financial decentralization of expenditures and financial decentralization of income on the misery index of Iranian provinces has been positive. A one percent increase in financial decentralization indicators of expenditures and revenues increases misery by 0.041 percent and 0.045 percent, respectively. This means that the implementation of decentralization policies in the country can be accompanied by an increase, albeit a small one, in the index of economic misery. These results could indicate that in the developing country of Iran, decentralization will lead to increased disparities between regions, which is due to the high level of corruption and the inability of provincial governments to manage the resources allocated to them. Is. Also, other findings of the article indicate the decreasing effects of capital stock and literacy rate and the increasing effects of annual population growth rate and GDP on the misery index. Capital share coefficients of GDP and population growth rate were (-0.04) and (0.47), respectively. In addition, the estimated coefficient for the literacy rate was -0.96%.

Keywords

References

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Journal of Applied Economics Studies in Iran
Volume 10, Issue 39
September 2021
Pages 107-139

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