Providing an Econometric Model to Investigate the Effects of Decentralization Policy on Economic Growth in the Third Plan of Development in Iran

Decentralization is a process in which local affairs are administrated by local authorities outside of activities of the central government. Today, decentralization policy is considered as one of the ways that most countries adopted to improve public sector performance. In this paper using geometric analysis, innovation that this paper represents, an econometric model is considered to evaluate the effects of the decentralization policy on economic growth. The model is consistent with economic, political and social circumstances in Iran. This model investigates the effects of decentralization policy of the Third development plan on economic growth via estimatingappropriate indicators. Estimation results reveal the fact that an increase in decentralization indicator has a positive effect on national economic growth despite the inappropriate distribution of powers among different provinces of the country.