ECONOMIC STRATEGY
Year:2012 | Volume:1 | Issue:2|Papers Count:7

This paper is based on an applied research whose main question is: “Which budgeting system is more suitable for the realization of strategic goals of the Islamic establishment as well as its general policies and medium-term development programs?” To answer this and other questions, the present research has been carried out in three stages through an analytical method. In the first stage, library method has been used to study documents related to background of budgeting and its theoretical fundaments as well as global experiences and findings resulting from domestic studies and upstream documents of the Islamic establishment. In the second stage, an analytical comparative method has been used to analyze and compare findings resulting from national and international experiences with the optimal budgeting structure, with upstream documents of the Islamic establishment. In the third stage, meta-analysis has been used to analyze optimal structure of the country’s budgeting system and conclusions have been offered.At last, after making sure about correctness and lasting nature of the findings by a group of relevant experts, the conceptual model for reforming the country’s budgeting structure has been proposed on the basis of the upstream documents of the Islamic establishment and international standards.

Urbanization is a major feature of economic development, and involves many structural changes across the economic system which have important implications for energy consumption. This paper provides empirical evidence on urbanization and energy consumption in Iran over the period 1973–2006, using ARDL testing approach and factor decomposition model. The results of the bounds test show that there is a stable long-term relationship among total energy consumption, population, GDP (gross domestic product) and the level of urbanization. meanwhile, the results of the causality test using ECM (error correction model) to test short- and long-term dynamics of the relevant variables, indicate that there exists only a unidirectional Granger causality relationship between urbanization and total energy consumption in the short run. On the other hand, the results support the existence of a long-term, bidirectional causality relationship between urbanization and total energy consumption. Factor decomposition analysis indicates that technical progress, urbanization process, and economic development have respectively the greatest impacts on the energy consumption in Iran. At present, the share of urbanization in increasing energy consumption is smaller than the past, and the energy intensity is gradually on the fall.

In modern times, not only economic development, but continuation of life depends on energy. In today's world, energy is provided by various resources, such as oil, gas and renewable energies. Therefore, due to the strategic importance of energy in economic development and social welfare and given the limited volume of energy resources, especially natural gas, it is necessary to manage proper consumption of such valuable resources as natural gas in order to avoid an energy crisis in the near future.The present study, will discuss the latest situation of natural gas reserves, production and consumption of in the world as well as in Iran, and factors consumption, including gas price, people’s income, and number of subscribers are reviewed.For this purpose, the annual data for the period of 1981-2008, and the ordinary least squares method is used. The results indicate that natural gas is an essential item in households consumption basket with the income elasticity of gas consumption standing at about 32% and the price elasticity of demand for gas amounting to about 57%. Findings also show that one percent increase in the number of gas subscribers will increase consumption by 0.68%.It seems that if in the absence of proper management and control on gas consumption, the country will face unimaginable problems in the near future. Therefore, it is imperative to optimize gas consumption. This paper explains the necessity of gas price adjustment while recommending the use of cultural mechanisms and other incentives to achieve that goal.

One of the most important goals of Iran's 5th Economic Development Plan is to change the existing approach to oil and gas resources and revenues. The main aspect of this appraoch is the “National Development Fund” (NDF) which has been mentioned in Iran’s 20-Year Perspective Plan as defined by the Expediency Council. The current paper, studies challenges facing the Fund in three major areas: independence from the government, transparency and investment goals. The results show that the NDF can be only successful under specific conditions; otherwise it will cause a lot of problems for the financial sector of the Iranian economy. Therefore, certain decisions should be made by policymakers to reach that situation. Firstly, the man goals of the NDF and its regulations must be clearly specified. Secondly, government’s access to the Fund should be limited by making withdrawal from the NDF conditional on the parliament’s permission. Thirdly, data on the inflow and outflow of the NDF should be made public for better supervision over the Fund’s performance. Moreover, we suggest that part of the NDF’s resources should be allocated to compensating the effects of the declining oil production.

Studying inflationary conditions in the Iranian economy has been always a preoccupation for many economic experts. The relationship between inflation and liquidity is among the most important issues discussed in the area of macroeconomics. However, due to new conditions of the Iranian economy and the impacts of the subsidy reform plan that relationship has totally changed in recent years, making study of inflationary impulses in the Iranian economy imperative.The present paper intends to address this issue with due attention to the supply side of the economy through an approach to production gap analysis. This issue has been a major concern for economic policymakers as the Iranian year 1391 (2012-2013) has been designated the year for supporting national production.This study uses various econometric techniques to project inflation in the above period. Findings indicate that the general condition of commodity prices in Iran will deteriorate in the current year.

In view of the direct relationship that exists between fair income distribution and such important macroeconomic variables as productivity and economic growth, fair income distribution has emerged as one of the most important macroeconomic goals of countries.This paper first uses Particles Swarm Optimization (PSO) algorithm to estimate rural and urban Gini coefficients in the period of 1971-2008, in the form of linear and exponentials functions. Then, based on the existing criteria, the best estimation model is chosen. Finally, the selected model is used to project the amount of Gini coefficient for urban and rural areas under various scenarios up to 2025. In this study, Gini coefficient is considered a function of gross domestic product (GDP), inflation rate, unemployment, size of government and the Human Development Index (HDI). Findings show that the exponential model illustrates rural and urban Gini coefficients with higher accuracy. By increasing GDP and HDI and decreasing the rates of inflation and unemployment, and the size of government in the selected model, one can observe improvement in the income distribution in urban and rural areas of Iran by the end of 20-Year Perspective Plan in 2025.

Factors affecting the tax ratio and its increase have been always of importance to statesmen and policymakers. According to the Fifth Economic Development Plan Act, to cut the Iranian government’s dependence on oil and gas revenues, the ratio of tax to the gross domestic product (GDP) should be at least 10 percent by the end of the plan (2015). Since result of study of panel data is more creditable than time series regression, provincial panel data have been used in this study. Findings obtained through panel data model indicate that increased ratio of the added value of service, mine, industry, and construction sectors to GDP, will increase tax ratio. In addition, tax ratio increases with any parallel rise in Gini coefficient for urban areas. Coefficient of all variables is meaningful at 95-percent level. There is a direct relationship between Gini coefficient and tax ratio which confirms Kuznets theory in Iran. Therefore, the more unequal is income distribution (the higher Gini coefficient is), there will be higher tax capacity and tax ratio can increase more easily.