Dutch Disease, Rentier State, and Resource Curse: A Characteristic Triangle and Ultra Challenge in the Iranian Economy

Yadollah Dadgar () and Zeinab Orooji ()
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Yadollah Dadgar: Department of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran.
Zeinab Orooji: Department of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran.

Iranian Economic Review (IER), 2020, vol. 24, issue 1, 129-157

Abstract: Owning Natural resources has been beneficial for some Countries, but hurtful for some others. Optimum management of natural resources in the former group has enhanced economic growth, bad governance, however, has led to Dutch Disease in the latter group. Bad governance in Iran has created Dutch Disease, Rentier State, and Resource Curse, DRR as a characteristic triangle. As the Iranian annual budget is financed by oil revenue, it is involved in a rentier state case. By applying analytical and statistical tools, this article is highlighting the different dimensions of a characteristic triangle in the Iranian economy. Positing DRR, as the number one challenge in the Iranian economy, is another mission of this article. A first specific feature of DRR is that its 3angles connect closely to each other. Secondly, DRR has led to weaken the Iranian taxing system. Thirdly, DRR has been in charge of the current less developed private sector. Some policy implications of this article include standardizing the Iranian taxing system, improving the Iranian "National Development Fund" and supporting the private sector to become a well-developed one. Disregarding DRR in Iran would deepen economic hardships. Curing DRR is the most urgent in the Iranian economy. Settling the DRR in Iran is a prerequisite of sorting out other challenges.

Keywords: Dutch Diseases; Rentier State; Resource Curse; Iranian Economy. (search for similar items in EconPapers)
Date: 2020
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