Pattern and determinants of public budget allocation to border regions in Iran

Abstract

The historical centripetal behavior of the government has made the border regions as periphery of the central areas in Iran. The regional disparities in Iran root in the economic structure of the country. Iran is one of the main exporters of petroleum and natural gas. The huge revenues of natural resources have reduced the dependence of central government to domestic economic activities and made Iran one of the closest economies in the world. This paper studies the pattern and determinants of public budget allocation to the border regions in Iran over the period 1989–2007. The results show that different characteristics of the border provinces such as geographical position, economic conditions, type of borders, distances from the capital, and natural resource richness influence the level and trend of their realized budgets.