Planning and Budget
samira ghanbari; Hamid Amadeh; Davood Danesh Jafari; teymoor mohammadi
Abstract
Today, financing through health insurance is known as one of the most important sources of financing in the health sector. In this regard, improving the level of satisfaction of the insured and increasing their access to medical services are among the most important goals of health insurance organizations, ...
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Today, financing through health insurance is known as one of the most important sources of financing in the health sector. In this regard, improving the level of satisfaction of the insured and increasing their access to medical services are among the most important goals of health insurance organizations, and organizations that provide access to suitable services without imposing a financial burden on their insured will be successful. For this purpose, the balance in the revenue sources and expenses of the organizations in question is very important. the purpose of this research is to examine the budget balance in five funds of Iran Health Insurance Organization during the period of 2008-2019 using monthly data and also to analyze the factors affecting the budget deficit of these funds including premiums, coinsurance, treatment and overhead costs and the number of services purchased by various funds of Iran Health Insurance Organization, from the perspective of their mediating role in reimbursement, behavior management and purchasing medical services, using by panel vector error correction model, in order to provide a solution to eliminate the budget deficit. The obtained results showed that in the long run, coinsurance paid by the insured and the premium paid to different funds of Iran Health Insurance Organization had a negative effect on the budget deficit of the mentioned funds. In contrast, the increase in treatment and overhead costs and the number of services purchased by Five funds of Iran Health Insurance Organization exacerbated the problem of budget deficit of these funds.
Political economy
Hossein Tavakolian; Reza Taleblou; Shaghayegh Abbasali
Abstract
Despite efforts to improve the governmental budget system in Iran’s current economic situation, no significant progress has been made. The relationship between the key stakeholders—namely the government, parliament, regulatory bodies, and the general public as the ultimate beneficiaries of ...
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Despite efforts to improve the governmental budget system in Iran’s current economic situation, no significant progress has been made. The relationship between the key stakeholders—namely the government, parliament, regulatory bodies, and the general public as the ultimate beneficiaries of the budget—is not properly regulated. As a result, there is decreased transparency and accountability among various government officials. Using the Generalized Method of Moments (GMM) for the period 1993–2018, the current study aimed to examine the government off-budget operations and their impact on inflation, with a focus on fiscal dominance via the banking system. The findings suggested that increased fiscal dominance via the banking system’s debt channel had a positive effect on inflation, thereby confirming the presence of fiscal dominance. The results also highlighted a negative relationship between political stability and corruption, on the one hand, and inflation, on the other. These variables remained at low levels throughout the analyzed period, indicating a need for greater attention from the government and political factions across the country.IntroductionThe inflation rate in Iran is a major concern that contributes to rising levels of poverty, inequality, economic instability, and reduced private sector investment. This persists despite the fact that many other countries have successfully managed similar issues. Unfortunately, monetary authorities in Iran have struggled to tackle this pressing problem. The Iranian economy has long struggled with the persistent issue of high inflation, which is largely attributed to fiscal dominance over the Central Bank. Moroever, addressing the budget deficit is partially achieved through off-budget operations facilitated by the banking system. Covering the period 1993–2018, this study examined the government off-budget operations and their impact on inflation, with a focus on fiscal dominance within the banking system. It actually dealt with the Central Bank’s inability to control inflation, highlighting fiscal dominance as a key factor. Fiscal dominance arises when fiscal policymakers are not required to balance expenditures with tax revenues, thereby compelling monetary policymakers to address government budget deficits.Materials and MethodsApplying the Generalized Method of Moments (GMM) to the period 1993–2018 in Iran, the present research examined the government off-budget operations and their impact on inflation, with a focus on fiscal dominance in the banking system. The study used the data from the Central Bank, international transparency websites, and Palta to analyze the quantitative effects of government borrowing from the banking system on inflation.Results and DiscussionThe findings revealed a direct relationship between inflation and government financing through the banking system, emphasizing its analytical significance for Iran’s economy. Due to legal restrictions on borrowing directly from the Central Bank, the government turns to state-owned commercial banks for financing, resulting in a form of active fiscal dominance. This approach increases government debt to the banking system, thus affecting various economic sectors and contributing to instability and chronic inflation. The financial practice, known as off-budgeting, is marked by a lack of transparency and inefficiency in government expenditures, further exposing fiscal dominance via the banking system. Additionally, variables of political stability and corruption control play a role, highlighting the need for government attention across different sectors and political factions in the country.Table 1. GMM Estimation of the Mode )Inflation as the Dependent Variable(VariablesGMMCoef.Std. Err.z|P>|zPolitical StabilityPOLITY-0.0002726.14E-5-4.4336930.0000 Corruption controlGC-0.0003782.10E-5-18.005330.0000Exchange rate growthGER0.0706140.0232223.0407630.0034Interest rateIR(-1)-0.0459500.008164-5.6285540.0000Money base growth rateGM2(-1)0.3848440.03588510.724310.0000Government debt growth rate to private banksGGBPB(-1)0.0076620.00038220.061880.0000Government debt growth rate to state-owned banksGGBGB0.0287050.00196614.599790.0000Government debt growth rate to privatized banksGGBSPB(-2)0.0064590.00011058.499070.0000Growth rate of government oil revenuesOILP-0.1363780.018692-7.2962170.0000R2= 0.614559 J-statistic=17.89458 Prob (J-statistic)=0.985014Instrument rank=43This study explored the off-budget operations of the Iranian government and their impact on inflation, with a particular focus on fiscal dominance through the banking system. Despite efforts to reform the government budget system, the lack of proper regulation in the interactions between budget stakeholders—including the government, parliament, regulatory bodies, and the general public—has led to reduced transparency and accountability among government officials. The research showed that increasing fiscal dominance through the banking system’s debt channel had a positive effect on inflation, thereby confirming the presence of fiscal dominance. Furthermore, the study underscored the negative correlation between political stability and corruption control, on the one hand, and inflation, on the other. This highlights the need for government attention across various sectors and political factions within the country. In sum, the Iranian economy faces a persistent challenge of high inflation, primarily driven by fiscal dominance over the Central Bank. The study highlighted the government’s dependence on off-budget operations, especially through the banking system, to address budget deficits. This financial strategy is marked by a lack of transparency and efficiency, resulting in economic instability and chronic inflation. The findings emphasized the urgent need for the government to review and reform regulations, reduce structural budget deficits, and improve transparency to effectively control inflation. The low levels of political stability and corruption control throughout the analyzed period underscored the current government’s challenges, stressing the need for comprehensive reforms and action across all sectors and political factions in the country.
Political economy
Behrouz Sadeghi Amroabadi; Ehsan Kazemi
Abstract
Improving the quality of institutions with development of the country's economic infrastructure can reduce the degree of fiscal policy cycles in developing countries. Therefore, the purpose of this study is to analyze the effects of good governance and political cycles on the liquidity and budget deficit ...
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Improving the quality of institutions with development of the country's economic infrastructure can reduce the degree of fiscal policy cycles in developing countries. Therefore, the purpose of this study is to analyze the effects of good governance and political cycles on the liquidity and budget deficit changes during 1978-2018. The research method is descriptive analytical by using econometric method of the GMM. Data are from the Central Bank of Iran and World Bank site for Iranian Economy. The research results show the effect of good governance on the variables of liquidity and budget deficit changes are negative and significant. Also the interactive effects of good governance and the election dummy variables on the liquidity and budget deficit changes are negative and significant. These results indicate that good governance during the elections can control the budget deficit and liquidity changes, hence to control the business-political cycles, suggest to improve the good governance in Iran.
Reza Mosavi Mohseni; Hamed Taheri
Volume 13, Issue 41 , February 2010, , Pages 123-137
Abstract
This paper investigates the sustainability of fiscal process in Iran. For fiscal process to be sustainable, government's intertemporal budget constraint should be satisfied. In this paper, we have assessed sustainability condition for period 1964-2007, using cointegration tests. The model is based on ...
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This paper investigates the sustainability of fiscal process in Iran. For fiscal process to be sustainable, government's intertemporal budget constraint should be satisfied. In this paper, we have assessed sustainability condition for period 1964-2007, using cointegration tests. The model is based on Bohn (1998) and the Barro's tax smoothing model (1986). This model is modified for an oil-producing country, noticing that oil income has comprised a large part of government income in Iran. Results show that fiscal process is not sustainable in Iran. The sustainability of the fiscal process is also compared in two periods, before and after the revolution. The estimated coefficients of the model indicate that the fiscal sustainability condition has become worse after the revolution