There has been an increasing interest in e)amining regional convergence in the
field of economic growth models in the r ast decade. A standard method of examining convergence has been the method II1troduc_:d by Barro and Sal-I-Martin (1991, 1992, 1995). Although there have hen many extensions in examining convergence and especially in line with endo,':enous growth models, but there has been few studies to analyze the effects c f govemment policies on regional convergence. We have examined convergence .n Iran,s provinces by using per capita demand deposits (a method first applied by Rahmani and Eckey (2004». The results on convergence are mixed. By assuming convergence (which is confirmed by empirical on Beta-convergence), we have examined the effects of government
policies by using some indexes. The empincal results imply that the speed of convergence across Iran,s provinces has been lowered by the government policies. Therefore, this study shows that government policies to reduce the gap between
provinces have not been successful in Iran.
JEL Classification: RII,O20,R50..
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