A Quantitative Analysis on Political Economy of Provincial Budget Allocation in Iran

Studying the political economy of regional budgeting, the paper tried to examine the impact of economic and political variables on the consumption, investment, and total provincial budgets in Iran, quantitatively. Therefore, two sets of programmatic and tactical variables were investigated in three panel data models over the period of 2000-2007. The results showed that the provincial budgeting is efficiency-oriented and not equity-oriented in Iran. In addition, initial capital endowment and population density associated negatively with the per capita budgets. Regarding the tactical variables, the results evidenced that provincial budgets increased in the years presidential elections were held. Moreover, the budgets were streamed more to the provinces with less participation rates in the presidential elections and with moreswing voters.