Fiscal Decentralization and Economic Growth in Iran

Economists and policy-makers believe that the Fiscal Decentralization is an effective strategy to promote economic growth. Thereby Economic Growth is seen as an objective of Fiscal Decentralization and efficiency in the allocation of resources in the public sector. This study analyzed the relationship between fiscal decentralization and economic growth in Iran for the period 2001-2007 .We used data for 28 provinces of the country estimated the model using a panel data regression with Fixed Effect. We find that fiscal decentralization has a positive effect on Iranʹs economic growth.