An Analysis of the Impact of Human Capital on Institutional Factors in Iran

,economic development and social welfare are among the priorities of every government and government. The quality of economic institutions is one of the most important factors of development. However, due to the abstract nature of institutions, its measurement is associated with certain complexities. In this dissertation, the effect of human capital on the quality of institutions in Iran is examined.The institutional quality index presented in this study is based on Iranian provincial data for the period 2006 to 2016 and based on five components of the main indicators of good governance (accountability and the right to protest, government effectiveness, quality of regulations, rule of law and corruption control). Is. After normalizing the data, the panel data method was calculated using a two-stage least squares model (2sls) with Stata software. In order to determine whether our model in this dissertation is panel or cumulative, the F-Leimer test and analysis of its results were used and the panel model was approved. Then, using Hausmann test, it was concluded that finally the panel model with random effects should be applied to the data.According to regression coefficients, the results show a positive and significant effect of human capital on the quality of institutions in Iran. He states that the higher the human capital in the provinces, the better the quality of institutions. According to the results of this study, a one percent increase in the human capital index leads to a positive and significant increase of 0.21 in the institutional quality index.