The Political Economy of Investment in Non-Productive Sectors of Iran

The productiveness and flexibility of production against impulses is a prerequisite for the resilience of the Iranian economy. On the other hand, the realization of investment in manufacturing sectors depends more on the political economy of Iran than macroeconomic variable. In the current context of the Iranian economy, interest groups, by expanding the immortal sectors, impede the directing of capital to productive sectors. The phenomenon such as the instability of the industrial development strategy, the role of the interest groups in the immature sectors, and the failure to take policy tools to reduce the unproductive sector's returns has led to the institutionalization of the patient's political economy in the country. In this paper, the effects of political economy on investment in order to realize the strength of the economy are examined and some suggested strategies are proposed to exit from the current situation in order to boost investment in productive sectors.