Amir Hossein Ghaffari Nejad; Majid Maddah
Abstract
In the literature of political macroeconomics stresses role of political competition in the economic performance of countries; Political competition can influence economic growth by affecting resources allocation and quality of economic policies. This paper examines the effect of political competition ...
Read More
In the literature of political macroeconomics stresses role of political competition in the economic performance of countries; Political competition can influence economic growth by affecting resources allocation and quality of economic policies. This paper examines the effect of political competition on economic performance in Iran in the framework of a dynamic growth model by Heteroscedasticity and autocorrelation consistent estimators (HAC) method over the period 1364 to 1397. In this regard, we use the degree of alignment of government and parliament, power balance, power distribution, political and economic freedom and a composite index as the determinants of political competition. The results of estimates confirm the hypothesis of non-linear effect of political competition on economic growth in the Iranian economy as U-shape relationship such as at first the higher levels of political completion tend to be associated to smaller real GDP per capita, but after the optimal value (minimum political competition), production will increase. In this step, the actors of political system, by accepting the rules of political competition and avoiding factional policies focuses policies, focus policies that promote economic growth. This situation, which is known as the learning of political competition, enjoys society the benefits of competition political parties. The findings of this research supports the importance of political competition as one of the sources of economic growth.
s
Mohammadghasem Rezaee; Majid Maddah; Yeganeh Mousavi Jahromi
Abstract
Taxes are a policy-making tool for the economic stabilization and, on this basis; local taxes can influence provinces’ economic performance. Local taxes are taxes for which the rates and bases are determined by the local authorities. These taxes finance services to be provided for local residents. ...
Read More
Taxes are a policy-making tool for the economic stabilization and, on this basis; local taxes can influence provinces’ economic performance. Local taxes are taxes for which the rates and bases are determined by the local authorities. These taxes finance services to be provided for local residents. Local taxes influence regional economic growth for the following main reasons: increased competition among the regions, higher economic growth, decreased shadow economy and finally, improvement of taxpayer’s behavior. Thus, this research has reviewed and empirically analyzed the effect of corporate income tax, personal income tax, property tax and consumption tax as local taxes on country provinces’ economic growth. To this end, within the framework of ECM models, a PMG methodology was employed that made use of quarterly data during March 2005- July 2015. The results of the model estimation show that, property tax and consumption tax increase regional economic growth, whereas corporate income tax and personal income tax decreases the regional economic growth. Also, revenue-neutral shift away from either corporate income or personal income tax toward property or consumption tax leads to increases the regional long- run growth. The results indicate that optimal local taxation (with property and consumption tax bases) leads to provincial economic growth. So, this study can be used as guidance for economic policy-makers.
