Designing an Efficient and Incentive-Compatible Mechanism of Self-Adjusting in the Provincial Income-Expenditure System (in Persian)

Omidali Parsa (), Farhad Ghaffari () and Farhad Dejpasand
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Omidali Parsa: Faculty of Management and Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran.
Farhad Ghaffari: Faculty of Management and Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran.
Farhad Dejpasand: Department of Economics, Faculty of Economics, Shahid Beheshti University, Tehran, Iran.

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2023, vol. 28, issue 2, 155-188

Abstract: Mechanism design theory is the art of designing and guaranteeing a set of political and motivational rules in the interaction environment which, by creating the necessary and sufficient internal motivation in the agents, coordinates their behaviors in such a way that simultaneously realizes the individual goals and interests of the agents, and also the collective results desired by the policymakers and planners. This research aims to design efficient and incentive-compatible mechanisms of self-regulation in the income-expenditure system of the provinces, to concurrently maximize the incentive to collect provincial public revenues and reduce provincial imbalances. The library method, in the form of studying the existing laws and regulations, and documents, was used to collect data and information for 2022, and were analyzed in accordance with the approach of mechanism design theory. The findings of the present study show that by creating a complete and guaranteed dependence between the expression and collection of provincial public revenues with the amount of allocation of credits for the acquisition of provincial capital assets, and also the restoration of other provincial spending credits and the acquisition of capital assets, sufficient internal motivation in the provinces can be created. Such informed motivation maximizes the province's income and credit and realizes the provincial balances so that in the first year of implementation, at least 100 Hemats (thousand billion Rials) will be added to the country's general income in addition to the usual process.

Keywords: Efficient and Incentive-Compatible Mechanisms of Self-Regulation; Allocation Efficiency; Provincial Public Revenues; Other Provincial Spending Credits; Credits for the Acquisition of Provincial Capital Asset (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:auv:jipbud:v:28:y:2023:i:2:p:155-188

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