Political Institutions and Government Spending Behavior: Theory and Evidence from Iran

Dizaji, Sajjad Faraji ; Farzanegan, Mohammad Reza ; Naghavi, Alireza (2015) Political Institutions and Government Spending Behavior: Theory and Evidence from Iran. Bologna: Dipartimento di Scienze economiche DSE, p. 42. DOI 10.6092/unibo/amsacta/4152. In: Quaderni - Working Paper DSE (986). ISSN 2282-6483.
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Abstract

This study examines how quality of political institutions affects the distribution of government budget in Iran. We first introduce a mechanism through which this can shift government expenditure from patronage to more constructive public spending. Using impulse response functions (IRF) and variance decomposition analysis (VDC) on the basis of Vector Autoregressive (VAR) model, our results imply that a positive shock towards more democratic institutions leads to negative and statistically significant response of military spending and positive and statistically significant response of education expenditures. Our results are robust to different political institutional quality indicators, ordering of variables in the VAR and different specifications of government spending categories.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Dizaji, Sajjad Faraji
Farzanegan, Mohammad Reza
Naghavi, Alireza
Keywords
political institutions, military spending, Iran, VAR modelling
Subjects
ISSN
2282-6483
DOI
Deposit date
14 Jan 2015 15:03
Last modified
28 Oct 2015 11:25
URI

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