Sharif Digital Repository

Despite the growth in Iran’s petrochemical production, most of the plants are concentrated upstream; although the government has made various interventions to promote industrial development. The literature review shows that government intervention is necessary to solve market failures, especially in developing countries; but it should be tailored to the specific context and especially the distribution of the power. Most experts believe that the cause of the above phenomenon is feedstock rent and the reason for its continuation is the political influence of petrochemical companies. While not rejecting this view, we try to provide policy recommendations by looking more closely at the issue and... 

The role of government in economy has been a controversial subject in economics. Lately, there has been some fundamental change in evaluating this subject. One could mention two of these as 1) realizing the importance of micro-founded macro model for evaluating policy, and 2) taking into consideration the rent-seeking behavior of politicians. In this research, a general equilibrium in a micro-founded macro model will be discussed and then in political economics framework, the effect of government on this equilibrium will be investigated. Only the redistribution role of government has been considered. First, the model in which a benevolent government is seeking optimal policy is Discussed.... 

Findings of economics in last decade shows that social and economic institutions have direct influence on economic performance of a society. However, these institutions are determined by the state. In different regimes, the political power is in the hand of different social groups with different preferences and goals; as a result, different social and economic policies and institutions are take place in different political regimes. In this research, we study economic performance of a society under control of two different political regimes: in first, the majority rules the state and in second, there is a totalitarian regime in which; the political power is concentrated in hand of a group of... 

The low performance of the natural resource economies in terms of economic growth has been considered in different fields of social sciences recently. Variety of policies suggested escaping from this phenomenon with respect to different standpoints. In this research, based on a theoretical approach, we tried to model the leader and people’s behavior in resource rich countries with political economics viewpoint and rational players. The contribution of this research is the introduction of state owned enterprises (SOE) as a basis to resource curse, which has not been considered precisely before. In our model, we have two players (leader, people), two alternatives for resource allocation... 

The procyclical behavior of public investment expenditure in OECs is one of the main channels through which the blessing of the natural resource abundance turns into a curse. The focal issue about the public investment expenditures in OECs is the misallocation and the inefficiency of these expenditures which often appear in the form of white elephants- i.e. government investment projects with large scale and high social/political prestige for the politicians implementing theme, but with negative economic return- especially in the oil booms. Moreover, the imprical evidence shows that the efficiency of public investment management in OECs is positively and significantly correlated with the... 

Institution covers wide range of rules, laws and policies. Two bodies of literature around institutions and resource curse have evaluated institutional quality by limited indices. In addition, although different institutions have different effects on economy, the literature hasn’t classified different kinds of institution. Furthermore, resources can affect institutions in different ways. This research has been surveyed the impact of resource dependence on institutional quality. Institutions that regulate relation between governors and citizens were named governmental institutions. Institutions that regulate the relation of citizens were named nongovernmental institutions. Governmental... 

This paper develops a theoretical model based on economic misconceptions to explain the stylized facts of unsatisfactory long-term economic growth rates. Should the economic agents lack sufficient public understanding of economics, office-seeking politicians can take advantage of the situation and adopt populistic policies to get elected into office. Undermined economic growth is the price society pays for its ignorance. This mechanism is most relevant in democratic resource-abundant countries suffering from weak institutions. That is because natural resource price fluctuations make it more challenging to distinguish politicians’ performance and exogenous economic shocks, translating...