International Journal of New Political Economy

International Journal of New Political Economy

Economic–Political Power and Regional Economic Development in Iran: A Provincial Panel Data Analysis

Articles in Press

Document Type : Original Article

Authors
Abolfazl Shahmohamadi 1
Mohammad Ali Feizpour 2
Mehdi Hajamini 3
Mohammad Abedi Ardakani 4
1 Assistant Professor, Department of Economics, Ardakan University, Ardakan, Iran
2 Associate Professor in Economics, Department of Economics, Yazd University, Yazd, Iran
3 Associate Professor of Economics, Yazd University, Yazd, Iran
4 Associate Professor in Political Sciences, Yazd University, Yazd, Iran
10.48308/jep.2026.244619.1278
Abstract
Almost all of studies conducted in Iran have emphasized the heterogeneity of Iranian regions in terms of economic development. However, this paper attempts to examine regional imbalances in Iran from the perspective of political economy. In the first step, the Economic Development Index (EDI) calculated using the selected indicators and TOPSIS method. Likewise, the Economic-Political Power Index (EPPI) quantified using the country’s budget and the importance coefficient of each political position. After that, the power matrix for each province formed and EPPI calculated by TOPSIS method. Then, the relationship between EPPI and EDI investigated using analysis of variance and also static and dynamic panel data regressions. The findings show the fundamental heterogeneity in the distribution of economic-political power in Iranian provinces during 2004-2020. Considering the significance of the power index in all of models presented in this study, the results confirm that the economic- political power is one of the main factor that can explains existent unbalanced economic development of Iranian provinces. Therefore, it could not be expected a noticeable change in the convergence of economic development in Iranian provinces without changes in structure political power. According to the coefficient of determination of the research model, power alone explains 13% of the changes in the economic development index, and accordingly, it is suggested that by adjusting the power of the country's regions, the basis for increasing the economic development of less developed regions can be prepared.
Keywords
Economic Development
Economic-Political Power
Regional Imbalances
Power Matrix
Abbasi Taghi Dizej, R. and  Pashazadeh, A. (2021). Identifying the Factors Affecting Regional Inequality in Iran. Journal of Geography and Territorial Spatial Arrangement, 11(41), 25-50. DOI: 10.22111/GAIJ.2021.6573 (In Persian)
Abdulai A. (2014). Rethinking Spatial Inequalities in Development: The Primacy of Politics and Power Pelations. ESID Working Paper, 29, 1-38. https://doi.org/10.1002/jid.3265
Acemoglu, D. and Robinson, J, A. (2000). Political Losers as a Barrier to Economic Development. American Economic Review, 90, 126-130. DOI: 10.1257/aer.90.2.126
Acemoglu, D. and Robinson, J. A. (2006). Economic Backwardness in Polit-ical Perspective. American Political Science Review, 100(1), 115-131. https://doi.org/10.1017/S0003055406062046
Ali, K., Du, J. and irikkaleli, D. (2022). Modeling the Natural Resources and Financial Inclusion on Ecological Footprint: The Role of Economic Governance Institutions. Evidence from ECOWAS economies. Resources Policy, 79(6), 1-15. DOI:10.1016/j.resourpol.2022.103115
Alwy, A., Schech, S., (2004). Ethnic Inequalities in Education in Kenya. International Education Journal. 5(2), 266-274. https://files.eric.ed.gov/fulltext/EJ903854.pdf
Ansolabehere, S. & Snyder, J.M. (2006). Party Control of State Government and the Distribution of Public Expenditures. Scandinavian Journal of Economics, 108(4), 545-569. DOI: 10.1111/j.1467-9442.2006.00470.x
Arulampalama, W. Dasgupta, S., Dhillon, A., Dutta, B., (2009). Electoral Goals and Center-State Transfers: A Theoretical Model and Empirical Evidence from India. Journal of Development Economics, 88, 103–119. https://doi.org/10.1016/j.jdeveco.2008.01.001
Asatryan, Z. Baskaran, T. Hufschmidt, P. Stöcker, A. (2021). Regional Favoritism and Human Capital accumulation in Africa. ZEW Discussion Papers, 21030, 1-30. https://www.econstor.eu/handle/10419/232944
Ashtarian, K. (2007). The Relationship between Political-judicial Power and the Budget (a Case Study of the Current Budget Agreement of the Presidential Institution). Politicts, 37(2), 1-24. (In Persian)
Ansolabehere, S. & Snyder, J.M. (2006). Party Control of State Government and the Distribution of Public Expenditures. Scandinavian Journal of Economics, 108(4), 545-569. DOI: 10.1111/j.1467-9442.2006.00470.x
Avramescu, T. C. (2022). The Economic Growth and the Unemployment Rate. Scientific Bulletin – Economic Sciences, 21(1), 39-44. http://creativecommons.org/licenses/by-nc/4.0/
Ayodele, O. and Babatunde, A. (2015). "Effects of Temperature and Rainfall Shocks on Economic Growth in Africa. UNDP Africa Research Discussion Papers, 267028, 1-38. DOI: 10.22004/ag.econ.267028
Baland, J. M. and Robinson. J. A. (2008). Land and Power: Theory and Evidence from Chile. American Economic Review, 98 (5):1737–1765. DOI: 10.1257/aer.98.5.1737.
Barro, R, J. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106(2), 407-443. https://doi.org/10.2307/2937943
Besley, T., Persson, T. Sturm, D.M. (2010). Political Competition, Policy and Growth: Theory and Evidence from the United States. Review of Economic Studies, 77, 1327-1352. https://doi.org/10.1111/j.1467-937X.2010.00606.x.
Bruckner,M. Habib, Ch. B. and Lokanc, M. (2023). Natural Resources, State Ownership, and Economic Development. ANU Working Papers in Economics and Econometrics, 694, 1-95. https://ideas.repec.org/p/acb/cbeeco/2023-694.html
Carozzi, F. and Repetto, L. (2016). Sending the Pork Home: Birthtown Bias in Transfers to Italian Municipalities. Journal of Public Economics, 134, 42-52. https://doi.org/10.1016/j.jpubeco.2015.12.009
Corvalan, A., Cox, P., & Osorio, R. (2018). Indirect Political Budget Cycles: Evidence from Chilean Municipalities. Journal of Development Economics, 133, 1-14. https://doi.org/10.1016/j.jdeveco.2018.01.001
Damania, R. and Desbureaux, S. and Zaveri, E. (2020). Does Rainfall Matter for Economic Growth? Evidence from Global Sub-national Data (1990–2014). Journal of Environmental Economics and Management, 102(3), DOI: 10.1016/j.jeem.2020.102335
Dhar, P. N. (1987). The Political Economy of Development in India. Indian Economic Review, New Series, 22(1), 1-18. https://www.jstor.org/stable/29793452
Do, Q.A., Nguyen, K.T. & Tran, A. (2017). One Mandarin Benefits the Whole Clan: Hometown Favoritism in an Authoritarian Regime. American Economic Journal Applied Economics, 9(4), 1-29. DOI: 10.1257/app.20130472
Driouchi, A. (2014). Testing of Natural Resources as Blessing or Curse to the Knowledge Economy in Arab Countries. MPRA Paper, 58598, 1-28. https://mpra.ub.uni-muenchen.de/58598/
El Alaoui, M. (2021). Fuzzy TOPSIS: Logic, Approaches, and Case Studies. New York: CRC Press. https://doi.org/10.1201/9781003168416
Eskandari Ata, M. R.,  Mehregan, N., Pourfaraj, A., Karimi Petanlar, S. (2020). Spatial Analyses of Regional Inequality with Emphasis on Environmental and Political Factors. Journal of Economics and Regional Development, 26(18), 197-220. (In Persian) https://doi.org/10.22067/erd.v26i18.72081
Ezcurra, R. and Rodriguez-Pose, A. (2014). Government Quality and Spatial Inequality: A Cross-Country Analysis, Environment and Planning, 46(7), 1732-1753. DOI: 10.1068/a130046p
Ferraz, C., & Finan, F. & Martinez-Bravo, M. (2024). Political Power, Elite Control, and Long-Run Development: Evidence from Brazil, Journal of the European Economic Association, 22(6), 2870-2908. DOI: 10.3386/w27456
Ferraz, C., & Finan, F. (2011). Electoral Accountability and Corruption: Evidence from the Audits of Local Governments. American Economic Review, 101(4). 274–1311. DOI: 10.1257/aer.101.4.1274
Franck R., Rainer, I. (2012). Does the Leader’s Ethnicity Matter? Ethnic Favoritism, Education and Health in Sub-Saharan Africa. American Political Science Review 106 (2): 294-324. https://doi.org/10.1017/S0003055412000172
Fiva, J. H., Halse, A. H. (2016). Local Favoritism in at-large proportional Representation Systems. Journal of Public Economics, 143(3), 15-26. https://doi.org/10.1016/j.jpubeco.2016.08.002
Gallup, J. L., Jeffrey D. Sachs, J. D., Mellinger, A. D. (1998). Geography and Economic Development. International Regional Science Review, 22(2), 179–232. https://doi.org/10.1177/016001799761012334
Ghaffary Fard, M., Alamdar, G. A., Afzali, GH. (2021). Investigating the Trend of Provincial Income Inequality and the Effect of Allocating Provincial Budget Funds on it. Journal of Budget and Finance Strategic Research, 2(2), 79-106. https://doi.org/10.22054/joer.2019.11631
Chakamera, C., & Alagidede, P. (2018). The Nexus between Infrastructure (Quantity and Quality) and Economic Growth in Sub Saharan Africa. International Review of Applied Economics, 32(5), 641-672. DOI: 10.1080/02692171.2017.1355356
Gharakhani, S., Renani, M., Sarkhosh-Sara, A. Mousavand, M. (2022). Analysis of the Failure of Iran’s Economic Development Process in the Transition from Natural State During 1941-1979. International Journal of New Political Economy, 3(1): 31-60. DOI: 10.52547/jep.3.1.31
Grieb, K. J. (1974). Concentration of Political Power and Levels of Economic Development in Latin American Countries: A Comment and a Research Proposal. The Journal of Developing Areas, 8(4), 513-518. https://www.jstor.org/stable/4190181
Haque, A. U., Kibria, G., Selim, M. I. and Smrity, D. U. (2019). Labor Force Participation Rate and Economic Growth: Observations for Bangladesh. International Journal of Economics and Financial Research, 5(9), 209-213. DOI: https://doi.org/10.32861/ijefr.59.209.213
Hibbs, D. A. (1977). Political Parties and Macroeconomic Policy. The American Political Science Review, 71(4), 1467-1487. https://doi.org/10.2307/1961490
Hodler, R. & Raschky, P. (2014). Regional Favoritism. The Quarterly Journal of Economics, 129(2), 995-1033. https://doi.org/10.1093/qje/qju004
Hauk, E. & Cabrales, A. (2007). Democracy and the Curse of Natural Resources. UC3M Working papers, 075429, 1-35. https://ideas.repec.org/p/aub/autbar/709.07.html
 
Jung, H. (2023). Bureaucrats and Budgets in South Korea: Evidence for Hometown Favoritism. Journal of East Asian Studies, 23, 205–239. DOI:10.1017/jea.2022.33
Ibrahimzadeh, I., Mousavi, M. N. and Kazemizad, SH. (2012). Spatial Analysis of Regional Disparities between the Central and Border Areas of Iran. International Quarterly of Geopolitics, 8(25), 214-235. DOI: 20.1001.1.17354331.1391.8.25.7.3 (In Persian)
Izadkhasti, H. (2020). Inequality of Provincial Budget Allocation and its Impact on Inequality of Regional Income in Iran. Economic Research, 19(75), 39-70. https://doi.org/10.22054/joer.2019.11631
Izadkhasti, H. (2019). Analysis the Model of Provincial Capital Funds Allocation in Iran: Efficiency-Based and Equality- Based Approach. Journal of Economic Studies and Policies, 6(1), 131-154. https://economic.mofidu.ac.ir/article_37097.html
Javid, M. (2019). Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis. Sustainability, 11(12), 3359. DOI:10.3390/su11123359
Keneck-Massil, J., Nomo-Beyala, C., & Owoundi, F. (2021). The Corruption and Income Inequality Puzzle: Does Political Power Distribution Matter?, Economic Modelling, 103, 1-34. DOI: 10.1016/j.econmod.2021.105610
Kim, S. (2008). Spatial Inequality and Economic Development: Theories, facts, and policies. Working Paper, 16, Commission on Growth and Development, Washington, DC: The International Bank for Reconstruction and Development. https://openknowledge.worldbank.org/handle/10986/28050?
Kim, D. H. and Lin, S. C. (2017). Natural Resources and Economic Development: New Panel Evidence. Environmental & Resource Economics, 66(2), 363-391. DOI: 10.1007/s10640-015-9954-5
Klingensmith, Z. (2019). Political Entrepreneurs and Pork-Barrel Spending. Economies, MDPI, 7(1), 1-17. DOI:10.3390/economies7010016
Larcinese, V., Rizzo, L., Testa, C. (2006). Allocating the U.S. Federal Budget to the States, The Impact of the President. The Journal of Politics, 68(2), 447–456. https://doi.org/10.1111/j.1468-2508.2006.00419.x
Lederman, D. and Maloney, W. F. (2007). Natural Resources : Neither Curse nor Destiny. World Bank: World Bank Publications. https://ideas.repec.org/b/wbk/wbpubs/7183.html
Lipset, S. M. (1959). Some Social Requisites of Democracy: Economic Development and Political Legitimacy. American Political Science Review, 53(1), 69-105. https://doi.org/10.2307/1951731
Matos, P., da Silva, C., dos Santos, D., & Reinaldo, L. (2020). Credit, Default, Financial System and Development. The Quarterly Review of Economic and Finance, 79(3), 281-289. DOI: 10.1016/j.qref.2020.07.001
Mohammadi Kangarani, H., Shamekhi, T. and Ashtarian, K. (2011). Investigation of the Effects of Formal and Informal Lobbying of Organizations on Budget Allocation, Study of Natural Resources Field in 4th Development Plan of Kohgiloye and Boyerahmad Province. Iranian journal of Forest, 2(4), 331-343. https://www.ijf-isaforestry.ir/article_4359.html?lang=en (In Persian)
Moshiri, S. & Hayati, S. (2017). Natural Resources, Institutions Quality, and Economic Growth; A Cross-Country Analysis, Iranian Economic Review, 21(3), 661-693. DOI:10.22059/ier.2017.62945
Mousavi, M. and Bayramzadeh, N. (2024). Spatial Analysis of the Trend of Regional Inequalities in Iran. Quarterly of Geographical Data, 33(131), 105-125. DOI: 10.22131/sepehr.2024.2017054.3039 (In Persian)
Nagy, D. (2016). City Location and Economic Development, Meeting Papers, 307, 1-55. https://ideas.repec.org/p/red/sed016/307.html
Needler, M. C. (1968). Political Development and Socio-economic Development: the Case of Latin America. The American Political Science Review, 62, 889-897. http://sci-hub.tw/10.2307/1953438
Nisa, M. and Khalid, F. (2024). Impact of Infrastructure on Economic Growth: A Comparative Analysis of Developed and Developing Countries. Journal of Asian Development Studies, 13(1), 1161-1173. https://doi.org/10.62345/jads.2024.13.1.95
Nourbakhsh, Farhad (2002). Human Development and Regional Inequalities in Iran, a Model for Policy Making. Journal of International Development, 2, 1-17. https://doi.org/10.1002/jid.914
Nurkse, R. (1971). The Theory of Development and the Idea of Balanced Growth. In: Mountjoy, A.B. (eds) Developing the Underdeveloped Countries. Geographical Readings, London: Palgrave Macmillan. https://doi.org/10.1007/978-1-349-15452-4_9
Olaseni, M., and, Wale, A. (2012). Vision 20:2020 and the Challenges of Infrastructural Development in Nigeria. Journal of Sustainable Development ,5(2), 63. DOI:10.5539/jsd.v5n2p63
Olejnik, L. (2019). Local Political Business Cycles and Administration Spending in Polish Local Governments. Economic and Regional Studies, 12(2), 185-199. DOI: 10.22004/ag.econ.292037
Palaniswamy, N., Krishnan, N. (2012). Local Politics, Political Institutions, and Public Resource Allocation. Economic Development and Cultural Change, 60(3), 447-473. DOI: 10.1086/664020
Parizadi, T. and Mirzadeh, H. (2018). Regional Development in Iran with a Distributive Justice Approach. Journal of Applied Researches in Geographical Sciences, 18(50), 179-198. DOI: 10.29252/jgs.18.50.179 (In Persian)
Perez, C. and Claveria, O. (2020). Natural Resources and Human Development: Evidence from Mineral-dependent African Countries using Exploratory Graphical Analysis. Resources Policy, 65(3). DOI: 10.1016/j.resourpol.2019.101535
Pishgahifard, Z., ghalibaf, M., Moradinia, S. and Moemeni, H. (2013). Pathology of the Spatial Distribution of Political Power in the Metropolis of Tehran. Geography, 11(38), 93-112. https://mag.iga.ir/article_705204.html?lang=fa (In Persian)
Pellegrini, L. (2007). Natural Resources and Economic Development. Development and Change, 38(2), 354-355. DOI:10.1111/j.1467-7660.2007.00415_6.x
Pradhan, R. P., Arvin, M. B., Norman, N. R. and Bele, S. K., (2014). Economic Growth and the Development of Telecommunications Infrastructure in the G-20 Countries: A Panel-VAR Approach, Telecommunications Policy, 38(7), 634-649. DOI: 10.1016/j.telpol.2014.03.001
Quinckhardt, P. (2023). The Value of a Party: Local Politics and the Allocation of Intergovernmental Transfers. European Journal of Political Economy, 80(3), 1-10. https://doi.org/10.1016/j.ejpoleco.2023.10247
Redmond, T.S. and Nasir, M. A. (2020) Role of Natural Resource Abundance, International Trade and Financial Development in the Economic Development of Selected Countries. Resources Policy, 66. 1-15. DOI: https://doi.org/10.1016/j.resourpol.2020.101591
Reino, J. L. G., Alcalde, A. H. (2011). Political Determinants of Regional Financing: the Case of Spain. Environment and Planning C: Government and Policy, 29, 802- 820. https://doi.org/10.1068/c1058r
Rosenstein-Rodan, P. (1943). Problems of Industrialization of Eastern and South- Eastern Europe. Economic Journal, 53(210/211), 202–211. https://doi.org/10.2307/2226317
Sahoo, A. K., Sahu, N. C., Sahoo, D. and Pradhan, B. (2014).Mineral Export and Economic Growth in India: Evidence from VAR Model Analysis. Mineral Economics, 27, 51-58. DOI 10.1007/s13563-014-0047-7
Schalick, L.M., Hadden, W., Pamuk, E., Navarro, V. and Pappas, G. (2000). The Widening Gap in Death Rates among Income Groups in the United States from 1967 to 1986. International Journal of Health Services, 30:13–26. DOI: 10.2190/8QMH-4FAB-XAWP-VU95
Shahmohammadi, A., Feizpour, M. A., Hajamini, M. (2024). Regional Differences of Economic-Political Power in Iran. International Journal of New Political Economy, 5(1): 139-165, DOI: 10. 52547/jep.5.1.139
Shankar, R. & Shah, A. (2003). Bridging the Economic Divide within Countries: A Scorecard on the performance of Regional Policies in Reducing Regional Income Disparities. World Development, 31(8): 1421-1441. DOI: 10.1016/S0305-750X(03)00098-6
Solé-Ollé, A., Navarro, P. S. (2008). The Effects of Partisan Alignment on the Allocation of Inter-governmental Transfers, Differences-in-Differences Estimates for Spain. Journal of Public Economics, 92, 2302–2319. https://doi.org/10.1016/j.jpubeco.2007.06.014
Soubbotina, T. P. (2004). Beyond Economic Growth An Introduction to Sustainable Development. 2nd Edition, WBI Learning Resources Series. Washington, D.C.: World Bank Publications. https://ideas.repec.org/b/wbk/wbpubs/14865.html
Torres, J, F. (1973).Concentration of Political Power and Levels of Economic Development in Latin American Countries. The Journal of Developing Areas, 7(3), 397-410. https://www.jstor.org/stable/4190181
United Nations Development Programme. (2020). Human Development Report 2020: The Next Frontier. UNDP. https://doi.org/10.18356/9789210055161
Wang, C. & Lu, Y. (2022). Regional Favouritism and Education Development. Regional Studies, 9(1), 302-319. https://doi.org/10.1080/21681376.2022.2072762
Zhang, C., Li, X. (2025). Officials’ Hometown Connections and Interprovincial Trade in China: based on the Perspective of Hometown Favoritism. Local Government studies, 51(3), 625-650. https://doi.org/10.1080/03003930.2024.2398017
Wadho, W.A. (2011). Education, Rent-seeking and the Curse of Natural Resources. MPRA Paper, 37831, 1-21. https://mpra.ub.uni-muenchen.de/37831/
Zuvekas, C. (1974). Concentration of Political Power and Levels of Economic Development in Latin American Countries: A Comment. The Journal of Developing Areas, 8(4), 507-512. https://www.jstor.org/stable/4190180
 
International Journal of New Political Economy

Articles in Press, Accepted Manuscript
Available Online from 25 September 2026

  • Receive Date 29 May 2026
  • Revise Date 13 September 2026
  • Accept Date 25 September 2026
  • First Publish Date 25 September 2026
  • Publish Date 25 September 2026