Economic Research and Perspectives

Economic Research and Perspectives

The Political Economy of Changes in the Budget Bill (Capital Budget) in the Islamic Parliament of Iran

Authors
mostafa dinmohammadi 1
Zeynab Farhadi 2
1 Assistant Professor of Economics,Faculty of Social Sciences, University ofZanjan, Zanjan, Iran
2 Master of Economics, University of Zanjan,Zanjan, Iran
Abstract
Aim and Introduction
What is the status of the Parliament’s changes in public spending? In what fields is it? Or even when it takes place?
The answers to these questions are analyzed in the context of the political economy of the budget in the parliament. The political economy of the budget observes the function of goals different from efficiency and effectiveness in the budgeting process, which imposes itself on the goals of budgeting. When the budget bill is sent to the parliament by the government, it is exposed to the demands of the representatives of different geographical areas.
In the analysis of the public sector, there has been a literature called “pork barrel”, which has observed the role of political and legislative institutions in changing the public budget in line with regional and party political goals. Pork barrel was originally meant to store meat.
Methodology
This study tries to use the theoretical approach of pork barrel and field studies to investigate and analyze the process of changes in the structure of public credits of government investments, which is known as the capital assets acquisition budget of the government bill in the parliament in Iran. This study requires knowing the status of budget changes in the parliament. On the other hand, the evaluation of the considerations of the pork barrel literature regarding the budget of public credits, the acquisition of capital assets, also takes into account the changes in the budget presented to the parliament compared to the budget approved by the parliament.
The present study is an applied research in terms of type and a descriptive one in terms of method. In this study, the qualitative changes of the parliament in the rulings of the single article and the budget notes have not been addressed, and only the quantitative (Rials) changes in the appropriations tables for the acquisition of capital assets in the budget have been considered. The data of this study have been calculated and extracted for the first time.
The review period of macro and total budget figures covers a 25-year period from 1997-2022, and micro-indexes and budget lines include a 13-year period from 2009-2022.
Results and Discussion
The findings of this study show that the share of the parliament in the change in credits for the acquisition of capital assets was 36% during the review period. The calculated index shows that the parliament in Iran significantly changes the budget bill and about one third of the budget changes are made by the parliament. The issue of how much the parliament is allowed to change in the bill presented by the government is one of the most challenging issues in the political system in Iran.
The Parliament's approach to changes in appropriations for the acquisition of capital assets in the budget bill has often been to increase appropriations. About 88% of the Parliament's changes in the budget lines of capital asset acquisition have been in order to increase the validity of the existing stable lines and create new construction lines. The issue of roads, water supply and distribution has been the main priority axes of the representatives to press and request to change and increase property acquisition credits in the parliament.
Parliament's changes in the bill have increased significantly in the second half of the study period. This issue is related to the change in the composition of the consolidation commission and the government's relationship with the parliament. The exclusive role of the Consolidation Commission and its effective members provides a wide possibility to apply rent-seeking behaviors in the bill.
The inferential analysis of the research results shows that the pork barrel approach is confirmed in the budget bill changes by the parliament during the review period. By definition, in the pork barrel approach, credit is used from national sources with a regional approach.
In terms of the time structure of political changes in the parliament and the government, the first year of each new parliament period coincides with the last year of the incumbent government or the fourth year of the government. The results indicate that the highest volume of changes in the appropriations for the acquisition of capital assets in the law compared to the bill occurs in the years of political change of the government and parliament (the first year of the beginning of the parliament), which is the last year of the government.
The findings of the study show that the size of the changes in the growth of the asset acquisition budget is not affected by the political alignment between the parliament and the government, which can be due to the dependence of the budget on oil and the non-partisan system of the parliament.
Conclusion
The summary of the results shows that the parliament in Iran has a very strong and direct role in the changes of the budget bill, although these changes are not due to the dominance of the pork barrel approach in line with the public and macro interests in the national economy. Since one of the most important debates regarding the amendment of the budget bill is related to the amendment and organization of the budget bill formulation and approval process, it is necessary to make meaningful amendments in the bill review model in the parliament. Of course, representatives usually do not pass laws that limit their powers. In this case, there is a need for national and interagency consensus in correcting the budget review path in line with the interests and macro goals and the trans-local and regional approach.
Keywords
Budget Bill
Capital Budget
Islamic Parliament of Iran
Pork Barrel

Subjects

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Economic Research and Perspectives
Volume 23, Issue 3
Autumn 2023
Pages 53-80