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

Arbeitspapier

This study examines how the quality of political institutions affects the distribution of the government budget in Iran. We first introduce a mechanism through which democracy can shift government expenditure from national defense (military) to productivity-enhancing public spending (e.g., education). Using impulse response functions (IRF) and a variance decomposition analysis (VDC) on the basis of a vector autoregressive (VAR) model, our results imply that the response of military spending to an improvement (a deterioration) of democratic institutions is negative (positive) and statistically significant, whereas that of education spending is positive (negative) and significant. Our results are robust to other indicators of political institutions, different orderings of variables in the VAR and alternative specifications of government spending categories.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 5505

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Structure, Scope, and Performance of Government ; Public Goods ; Capitalist Systems: Political Economy ; Economywide Country Studies: Asia including Middle East ; Institutions and Growth
• Thema: political institutions ; military spending ; education spending ; Iran ; VAR modeling

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Dizaji, Sajjad Faraji ; Farzanegan, Mohammad Reza ; Naghavi, Alireza
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2015

Weitere Informationen

• Handle: http://hdl.handle.net/10419/123143
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ