The Effects of Fiscal Decentralization on the Distribution of Development Opportunities in the Iranian Provinces

Document Type : Original Article

Authors

1 PhD Candidate in Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran

2 Assistant Professor of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran

3 Associate Professor of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran

10.29252/jem.2023.230882.1828

Abstract

Regional equal opportunities are the most important socio-economic challenges, whose inappropriate distribution can have detrimental effects on achieving economic stability and integrated progress of a country. Fiscal decentralization is one of the factors that affect the distribution of development opportunities. For this purpose, in the current research, first, by using the two-stage TOPSIS method, an attempt is made to calculate the composite index of development opportunities in six sectors (cultural-social, educational, infrastructure, health-therapeutic, environmental, and economic), then, the short and long-term effect of fiscal decentralization on the equal distribution of development opportunities in the Iranian provinces spanning from 2006 to 2020 is investigated here by using Panel ARDL. The results imply that the impact of the variables of expenditure and revenue decentralization on the equality of development opportunities is positive in the short term, nevertheless, depending on the levels of development of the provinces, in the long term. Consequently, the more developed the provinces are and have a higher GDP per capita, the more equal the distribution of development opportunities may occur. Furthermore, the model estimation results indicate that there is a negative relationship between economic growth and equality of opportunities in the short term and a positive relationship in the long term. In addition, it was found that the variable of relative population density has a negative and significant effect on the equal distribution of opportunities in the short and long term.

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References

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