Journal of Economic Research (Tahghighat- E- Eghtesadi)

Journal of Economic Research (Tahghighat- E- Eghtesadi)

Fiscal Illusion and the Demand for Government Expenditures on the Iranian Economy

Document Type : Research Paper

Authors
Majid Maddah 1
fozieh jeyhoontabar 2
Zohreh Rezapour 3
1 Associate Professor of Economic, Faculty of Economic, Management and Administrative Sciences, Semnan University, Email: majid.maddah@profs.semnan.ac.ir
2 Lecturer, Department of Economic, Faculty of Management and Economic of Baft, Shahid Bahonar University of Kerman, Kerman, Iran
3 Ph.D. in Economics, Faculty of Economics and Administrative Sciences, University of Isfahan
10.22059/jte.2014.53179
Abstract
Abstract
According to public choice theory, the features of the tax structure effect on voters' perceptions from the tax burden, so they pay more cost for public goods, lower than the estimate. In this study has been investigated the relationship between tax and public expenditures in the Iranian economy during 1360-1390 based on public choice theory to examine the level of government spending. Theoretical model was achieved after combining the standard median voter model with fiscal illusion through less visible taxes (indirect). For estimation of model were specified ARDL and ECM models. Results from estimated models show that fiscal illusion is due high share of oil revenues in Iranian economy and taxes invisible not associated with increasing level of government expenditures.
Keywords
Keywords: "Fiscal illusion"
"Tax"
"Public expenditure"
"Public goods"
"Tax burden"
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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 49, Issue 4 - Serial Number 4
Winter 2015
Pages 729-750

  • Receive Date 14 December 2013
  • Revise Date 23 May 2014
  • Accept Date 30 September 2014