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Optimal Government Budget Allocation According to Aggregate Welfare using Generalized Method of Moments (in Persian)

Author

Listed:
  • Noori, Ali Heydar

    (Faculty of Management, Department of Economics, Economic Development, Islamic Azad University, Arak Branch, Markazi Province, Iran.)

  • Sarlak, Ahmad

    (Faculty of Management, Arak Branch of Azad University, Markazi Province, Iran)

  • Rahmati, Mohammad Hossein

    (Faculty of Management and Economics, Sharif University of Technology, Tehran, Iran)

Abstract

How should the government budget be allocated to public education, higher education, health, transportation, IT, energy, or indirect public services including expenses on laws and regulations, business governance, and tax reforms. We examine data between 1989 and 2019 of public spending and their outcomes for each affair and title. The results show that despite that number of students declined over time, the spending on public education has been raised. The structural model is estimated by generalized method of moments, and the estimates show that households put significant weights on education and health, as well as energy. However, even with considerable weights on these public goods, due to inefficient production of public services, the counterfactuals illustrate that more spending on tax reform, business environment, and governance relative to actual budget is optimal.

Suggested Citation

  • Noori, Ali Heydar & Sarlak, Ahmad & Rahmati, Mohammad Hossein, 2022. "Optimal Government Budget Allocation According to Aggregate Welfare using Generalized Method of Moments (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 26(4), pages 65-91, March.
    • Handle: RePEc:auv:jipbud:v:26:y:2022:i:4:p:65-91
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    More about this item

    Keywords

    Welfare; Optimal Allocation; Generalized Method of Moments; Public Budget; Budget Outcome;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems

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