Investigating the Causes and Effects of Fiscal Illusions in Iran During 1978-2014

The fiscal illusion is the source of distrust between the government and the people, which can affect the performance of the country's economy in the formal sector and affect the variables of macroeconomics such as government budget and tax revenues. The fiscal illusions of the state budget channel affect the economic growth of countries. This phenomenon is most likely to occur in countries where government incomes and expenditures are not fully recognized or controlled by taxpayers; as a result, they increase demand for goods and services and increase government spending. The purpose of this study is to investigate the Causes and results of fiscal illusion and Process it's in Iran during the years of 1978-2014. in this study, the fiscal illusions in the context of the model of LISRE software (Linear Structural Relationships) are specified and measured by the data given from the Central Bank and the Statistics Center of Iran during the years of 1978-2014. The results indicate that the most important determinant of the size of fiscal illusions in Iran is the tax burden that policymakers try to conceal by creating government debt illusions and illusions of private sector expenditures on public debt levels.