The National Development Fund or Direct Distribution of Oil Revenues (A Comparative Examination)

The existence of oil rich resource and its challenges for optimal management is very important issue in development of Iranian economy. This paper tries to investigate the effect of different oil revenue circulation on Gross Domestic Production (GDP) and its components. Thus, the paper analyzes two approaches based on "National Development Fund" {NDF} and "Direct Distribution of Oil Revenues" (DDOR) by using computable general equilibrium model. Findings show that the NDF approach have a appropriate effect on GDP in long run, but the DDOR approach is better than NDF in term of decreasing dependence of Government Budget to oil revenues. However, if both approaches are considered as complementary and combined, all GDP components except Government expenditure are improved as well as GNP as a whole is increased. Thus, this paper suggests that the DDOR approach must be applied as a complementary rather than alternative approach along with the NDF approach.