Investigating the effects of fiscal decentralization on equal distribution of development opportunities in Iran provinces

Regional equal opportunities are the most important socio-economic challenges, whose inappropriate distribution can have detrimental effects on achieving economic stability and integrated progress of a country. Fiscal decentralization is one of the factors that affect the distribution of development opportunities. For this purpose, in the current research, first, by using the two-stage TOPSIS method, an attempt is made to calculate the composite index of development opportunities in six sectors (cultural-social, educational, infrastructure, health-therapeutic, environmental, and economic), then using the vector autoregression method. The effect of fiscal decentralization on the equal distribution of development opportunities in the Iranian provinces spanning from 2006 to 2019 is investigated here by using Panel VAR. Additionally, a consequence of the existence of collinearity between the variables, the long-term relationships between the variables are determined and estimated using the Fully Modified Least Squares (FMOLS) method. The results imply that the impact of the variables of expenditure and revenue decentralization on the equality of development opportunities is positive in the short term, nevertheless, depending on the levels of development of the provinces, in the long term. Consequently, the more developed the provinces are and have a higher GDP per capita, the more equal the distribution of development opportunities may occur. Furthermore, the model estimation results indicate that there is a U-shaped association between economic growth and equality of opportunities. In addition, it was found that the variable of relative population density has an insignificant effect in the short term,