Evaluating Regional Development Policies Using Social Welfare Convergence of Iran’ Provinces: An Application of Nonlinear Spatial Error Econometric Model

The convergence of social welfare is one of the criteria for evaluating regional development policies. The purpose of this paper is to analyze the convergence of social welfare for evaluating regional development from 2000 to 2013. To this end, a nonlinear spatial error star econometrics technique is used to separate linear and nonlinear regimes.
According to the results, the provinces can be divided into two groups: in the first group of provinces, the social welfare growth is affected by the welfare of the regions themselves and spatial effects are not observed among them. In the second one, however, spatial effects are observed among the provinces, which include Qom, Isfahan, Khuzestan, Chaharmahal and Bakhtiari, Fars and Bushehr. Other provinces are in the first group. Moreover, the results show a convergence among the regions of the first group while there is no convergence among the second group. Therefore, Policies have failed to eliminate the regional inequalities and imbalances.
JEL Classifications: I31, C20, R12