The effect of government spending on private investment in Iran during the period 1341-1389

For a detailed understanding of the effect In developing countries،including Iran because of the public sector is the main economic activity، the government sector have a significant impact on the private sector. This study examines the impact of government spending on private sector investment. For a detaild underestanding of the effect، is separation government spending to consumption spending and capital spending and using a library and articles، data and statistics of the Central Bank during the period from 1341 to 1389، and using the ARDL method، have been estimates variables. The results showed that the negative effect of government spending on private investment، but capital costs، have the positive effect on private investment but are meaningless. So pay more attention to the development of infrastructure and as well as supporting private sector led growth and prosperity of this part. Inflation factors as production costs have a negative effect on private investment، but the variables related to the oil shock and development programs have a positive effect on private investment. Thus، suggest that government have newer support of the constitution 44 original based on privatization and with reduced consumer spending and investment guidance to manufacturing sector، Provide suitable conditions for growth and activity of the private sector.