An Examination of Reasons for the Failure of development Plans in Iran: An Institutional Analysis

Wrong theoretical base and bad economic policies are the main reasons for the failure of development plans in Iran.Infact the emphasize on neoclassical approach and neglecting preconditional institutional structure have adversly affected people s incentives for development. Thus converting development plans into a set of scattered projects . Development ,require the existence of appropriate democratic institutions .Democracy is more than just a plan. It is rather a cumolative process .However , it could be achieved by taking necessary steps in that direction. Defining and enforcement of property rights,availability of free press , existence of an independent judiciary organisation and a multi party political systems are necessary stepts in that direction.Looking at people incentives in economic activities, we found that in Iran, people are mostly interested in investing in land and housing and hardly any productive activity,the result of which is underdevelopment of industrial sector. Thus it seems inevitable that not only it is necessary to establish necessary institutional structure but also attemt is to be made to change economic motives of people towars long term investment in productive activities.The experience of economic develoment of developed countries show that appropriate Industrial development policy of government is very essential in this regards.