Spatial analysis of the effect of financial decentralization on poverty, study of the country's provinces

Considering that from the late 60's and at the same time with the beginning of the first development plan and the beginning of the economic adjustment program, it was expected that some Iranian households would have difficulty in meeting their minimum needs (Khodadad Kashi et al., 2002). It received the attention of many studies. In recent decades, many economic researchers believe that governments will be able to reduce poverty and improve people's livelihoods through the implementation of fiscal decentralization policies. Therefore, the present study, along with other variables affecting poverty, examines the spatial effects of financial decentralization indicators on poverty for the provinces of Iran during the period 2006-2016. The results of the study indicate that financial decentralization of expenditures with coefficient (-0.1373) and financial decentralization of income with coefficient (-0.012) percent have negative and significant effects on poverty. The higher financial decentralization coefficient of expenditures compared to income indicates that Implementing a fiscal decentralization policy will be able to reduce poverty more effectively. In addition, the results of the present study confirm the positive and significant effects of spatial proximity for the provinces of the country.