Institutional Change, Policy Challenges, and Macroeconomic Performance : Case Study of the Islamic Republic of Iran (1979-2004)

Debates over the nature and direction of economic policy in Iran have intensified rather than abated after the tumultuous changes brought about by the revolution in 1979. In the span of these three decades, Iran has witnessed sweeping institutional...

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Bibliographic Details
Main Author:	Hakimian, Hassan
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	ADVERSE CONSEQUENCES AGGREGATE DEMAND AGRICULTURE ANNUAL % GROWTH ANNUAL GROWTH ANNUAL IMPORTS AVERAGING BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISES BANK CREDITS BANK LOANS BANKING BANKING SYSTEM BILL BILLS BLACK MARKET BONDS BRAIN DRAIN BUDGET DEFICIT BUDGET DEFICITS CAPITAL ACCUMULATION CAPITAL GOODS CENTRAL BANK CLARITY COMMODITIES COMMUNICATION COMPETITIVENESS CONSOLIDATION CONSUMER PRICE INDEX CONSUMPTION EXPENDITURE CORRELATION COEFFICIENT CORRELATION COEFFICIENTS CREDIT CURRENCY CURRENCY CRISES CURRENT ACCOUNT DEBT DEBT CRISES DEBT CRISIS DEBT SERVICE DEBTS DECISION MAKING DEFICIT DEMOCRACIES DEMOCRACY DEMOGRAPHIC DEMOGRAPHIC CHANGE DEPOSIT DEPOSITS DEPRESSIONS DEVELOPING COUNTRIES DEVELOPMENT DEVELOPMENT AGENCIES DEVELOPMENT PATH DEVELOPMENT PROJECTS DISTORTIONS DIVIDEND DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC SAVINGS ECONOMIC BOOM ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC INTEGRATION ECONOMIC ORDER ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC RESOURCES ECONOMIC STRUCTURE ECONOMIC TRENDS ECONOMIES ECONOMY EMPLOYMENT POLICY EQUILIBRIUM EQUITY EXCESS LIQUIDITY EXCHANGE EXCHANGE RATE DETERMINATION EXCHANGE RATE REGIME EXCHANGE RATE SYSTEM EXCHANGE REGIME EXCHANGE RESTRICTIONS EXPECTATIONS EXPORT REVENUES EXPORTS EXPOSURE EXTERNAL DEBT EXTERNAL EQUILIBRIUM FINANCIAL CRISIS FINANCIAL REFORMS FISCAL POLICIES FISCAL REFORMS FOREIGN CAPITAL FOREIGN COMPETITION FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE CONTROLS FOREIGN EXCHANGE POLICY FOREIGN EXCHANGE RESERVES FOREIGN INVESTMENT FOREIGN LOANS FOREIGN TRADE FUTURE GDP PER CAPITA GLOBALIZATION GOODS GOVERNMENT BUDGET GOVERNMENT SUBSIDIES GROWTH PERFORMANCE GROWTH POTENTIAL GROWTH RATE GROWTH RATES HIGH INFLATION IMBALANCES IMPORT IMPORT COMPRESSION IMPORTS INCENTIVES INCOME INCOME GROWTH INCOME LEVELS INCOMES INDUSTRIALIZATION INEFFICIENCY INFLATION INFLATION RATE INFLATIONARY PRESSURES INSTITUTIONAL ENVIRONMENT INSURANCE INTEREST INTEREST RATES INTERNATIONAL BUSINESS INTERNATIONAL ECONOMY INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL TRADE INVESTMENT INVESTMENT CLIMATE LABOR MARKETS LDCS LIBERALIZATION LIQUIDITY LIVING STANDARDS M2 MACROECONOMIC BALANCE MACROECONOMIC CONDITIONS MACROECONOMIC INDICATORS MACROECONOMIC LEVEL MACROECONOMIC MANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC REFORMS MACROECONOMIC STABILITY MACROECONOMICS MANAGERIAL EFFICIENCY MIDDLE INCOME COUNTRIES MONETARY EXPANSION MULTIPLE EXCHANGE RATE NATURAL RESOURCE NATURAL RESOURCES OIL ECONOMIES OIL ECONOMY OIL EXPORT OIL EXPORTER OIL EXPORTS OIL MARKETS OIL PRICE OIL PRICES OIL REVENUE OIL REVENUES OUTCOMES OUTPUT OWNERSHIP PAYMENTS PER CAPITA INCOME POLITICAL ECONOMY POLITICAL STRIFE POLITICAL UPHEAVAL POLITICAL UPHEAVALS POPULATION GROWTH POSTWAR PERIOD POSTWAR YEARS POVERTY REDUCTION PRICE CONTROLS PRICE FLUCTUATIONS PRICE INCREASES PRICES PRIVATE CONSUMPTION PRIVATE PROPERTY PUBLIC FINANCES RAPID GROWTH REAL GDP REAL GROWTH RATES REAL INCOME RECESSION REFORM PROGRAM REJECTION SHARE SHORT-TERM DEBT SHORT-TERM TRADE SHORTFALL SLOW GROWTH STRUCTURAL REFORMS SUBSIDIES SUBSIDY SUPPLY SUPPLY SIDE SUSTAINABLE GROWTH TAX REFORMS TOTAL EXPORTS TOTAL INVESTMENT TRACK RECORD TRADE TRADE BALANCE TRADE FINANCE TRADE POLICY TRENDS TROUGH UNCERTAINTY UNDUE INFLUENCE UNEMPLOYMENT UNIVERSAL SUFFRAGE VARIABLES VOLATILITY WEALTH WHOLESALE PRICE INDEX WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/478501468253788129/Institutional-change-policy-challenges-and-macroeconomic-performance-case-study-of-the-Islamic-Republic-of-Iran-1979-2004 http://hdl.handle.net/10986/28004

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Summary:	Debates over the nature and direction of economic policy in Iran have intensified rather than abated after the tumultuous changes brought about by the revolution in 1979. In the span of these three decades, Iran has witnessed sweeping institutional changes and has been affected by significant economic and political upheavals. At the macroeconomic level, too, there have been a number of shocks ranging from oil booms and busts, to war (with Iraq), trade sanctions, and internal political strife. This paper uses Iran's experience to reflect on growth and development in the context of political upheaval and an uncertain institutional environment. It is a premise of the paper that Iran's recent past presents a rare, 'laboratory' like, case for the study of growth and development in a broad context. This paper examines post-revolutionary Iran's macroeconomic policies and performance in a comparative context, appraising it against Iran's past trends and real potential. It shows how recurrent cycles of populism and pragmatism have characterized this period. The paper argues that two sets of factors have conditioned Iran's performance and will continue to taint her prospects for sustainable growth into the future. These are: (i) Iran's limited economic diversification and continued dependence on the oil sector, and (ii) the institutional setting in which post-revolutionary economic policies have been formulated and implemented for much of the last three decades.

Institutional Change, Policy Challenges, and Macroeconomic Performance : Case Study of the Islamic Republic of Iran (1979-2004)

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