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Economic Convergence and Rent-Seeking in Iran

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Author Info
Christian Dreger
Teymur Rahmani
Hans-Friedrich Eckey

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Abstract

The neoclassical growth model predicts convergence of productivity or per capita output levels across regions. If participation in the labor force is constant, convergence of per capita income is implied. We investigate this hypothesis for the Iranian economy using data on demand deposits as a proxy for GDP. Furthermore, the analysis controls for the effects of rent seeking. Due to its impact on the allocation of resources, rent-seeking is likely an impediment to overall growth. The results support absolute ß-convergence across Iran's provinces and provide some evidence on the adverse effect of rent seeking on regional convergence.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.74807.de/dp741.pdf
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Publisher Info
Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 741.

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Length: 25 p.
Date of creation: 2007
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Handle: RePEc:diw:diwwpp:dp741

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Related research
Keywords: Regional convergence; rent-seeking; economic growth;

Find related papers by JEL classification:
O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes

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This page was last updated on 2009-12-17.

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