Suchergebnisse

This study examines how negative oil shocks (due to the oil boycotts) could affect the military expenditure and the quality of democracy in the oil rentier states of Middle East by applying the annual date from 1990 to 2017. I use both economic and political variables in a panel vector autoregressive (PVAR) model of oil boycotts. The estimated PVAR models show significant impacts of oil boycotts both on key economic factors (government revenues, defence and non-defence expenditures) and on the different indicators of the political system. Using panel impulse response functions (PIRFs) and a panel variance decomposition analysis (PVDC) based on the estimated PVAR model, the findings indicate that the responses of political institutions and different indexes of democracy such as electoral, liberal, participatory, deliberative, and egalitarian democracy to decreases in oil rents are positive and statistically significant, whereas the response of military spending is negative and significant. Moreover according to the results of the variance decomposition analysis the variations in oil rents and political situation explain considerable parts of the variation of defence expenditures in the Middle Eastern countries implying that defence expenditures are considerably influenced by oil rents fluctuations and the quality of political system in the Middle East. These results are not sensitive to different proxies for oil abundance (such as fuel exports and amount of oil production) and different indicators of political institutions (V-DEM democracy indexes and polity2), as well as different orderings of variables in the panel VAR system.

The main purpose of this study is to investigate the dynamic relationship between government revenues and government expenditures in Iran as a developing oil export based economy. Moreover, I want to know how government expenditures and revenues respond to oil price (revenue) shocks. I use two different groups of the variables with two different time periods (quarterly and annually) to investigate the robustness and reliability of the results and to provide a more comprehensive base for comparison against different methodologies. For the first group of the variables (including oil price, oil revenues to GDP ratio, government total expenditures to GDP ratio and a dummy variable for capturing the effects of war with Iraq) I apply an SVAR model using annual data for the period 1970-2008. The results of the impulse response functions and variance decomposition analysis indicate that the causality is running from oil revenues to GDP ratio to government total expenditures to GDP ratio. Moreover the contribution of oil revenue shocks in explaining the government expenditures to GDP ratio is stronger than the contribution of oil price shocks. For the second group of the variables (oil revenues, government total revenues, government current expenditures, government capital expenditures, money supply and CPI) unrestricted VAR and VEC models have been applied using quarterly data for the period 1990:2-2009:1. The results of the impulse response functions and variance decompositions analysis for both VAR and VEC models indicate that the strong causality is running from government revenues to government expenditures (both current and capital) in Iranian economy while the evidence for the reverse causality is very weak. The results show that in the VEC model which the long-run behavior of endogenous variables is restricted to converge to their co-integration relationships, oil revenue shocks can affect the other macroeconomic variables more directly while in the VAR model this changes and works through the total revenues channel. Moreover the findings indicate that government revenues, government expenditures and money supply are important determinants of domestic price level in Iranian economy. Overall my results support the revenue-spending hypothesis for Iran. In this context Iran should enhance the effectiveness of fiscal policy by making budget expenditure less driven by revenue availability. This policy can help to avoid the costs and instability that variations in public spending generate mostly due to the fluctuations in oil revenues.

In this study, I investigate the short run and long run effects of government size and exports on the economic growth of Iran as a developing oil export based economy for the period of 1974 to 2008. For this purpose I use the bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework. A modified form of Ram's (1986) model has been applied to include both government size and exports as determinants of economic growth in addition to labor force and capital. I use total exports, oil exports and non-oil exports respectively in three different equations to assess their effects on economic growth. Moreover, according to Armey curve(1995) in each of the equations I test the existence of non-linear relationship between government size and economic growth. My findings show that in all of the equations both in long run and short run the Armey curve is valid for Iranian economy, indicating that both a very big size and a too small size of government are harmful for growth and Iranian government should adjust its size (to have smaller size, compared to the average size over the period of this study) for obtaining higher rates of growth. The results show that total exports, the amount of oil exports in terms of barrels and oil prices could affect the economic growth positively and significantly both in short run and long run. However because of the weaknesses of the Iranian non-oil sectors, the non-oil exports could not have significant effects on growth in the long run. As a result of this study in the short run, Iran should try to attract foreign technologies and investments to develop the capacity and ability of its oil production. In the short run this can be a reliable factor for having the stable economy in comparison with relying on uncertain oil prices. In the long run Iran should use the oil revenues to improve its economic structure and invest on some non-oil sectors to diversify its non-oil exports. This can create new resources for government revenues and will reduce the dependence of the economy on Oil exports.

This paper examines how negative shocks to arms imports due to external arms embargoes affect the military expenditure, quality of democracy and internal and external conflicts in a sample of 48 mainly developing countries for the period of 1990–2017. An important innovation is that we include both political and conflict factors in a Panel Vector Autoregressive (PVAR) model of arms sanctions. The results show that the responses of political system and different indices of democracy including electoral, liberal, participatory, deliberative, and egalitarian democracy to decreases in arms imports (as a percentage of GDP) are positive and statistically significant, and that of military expenditures (as a percentage of GDP) is negative and significant. Furthermore, our findings show that while arms restrictions do not significantly impact on religious tensions and external conflicts, they may intensify ethnic tensions and internal conflicts in developing countries. Overall the results indicate that arms embargo weakens the military sector by creating the negative impact on military expenditure and the size of armed forces and destabilizes the government. Although this improves democratic characteristics in developing countries, it may lead to higher ethnic tensions and internal conflict. In contrast to military expenditures, the responses of education expenditures, health expenditures and GDP per capita to negative shocks in arms imports are positive. The overall results are robust to different definitions of arms shocks, and different indicators of political institutions (V-DEM democracy indices and polity2), as well as differing orderings of variables in the panel VAR system.

We develop a model of the dynamics of economic sanctions in conjunction with the response of the sanction target. We apply this model to the case of the EU and US boycott of Iranian oil. Our VAR model finds significant impacts of sanctions both on key economic variables and on the political system. These effects, however, are limited in time and occur in the first two to four years of the sanction episode only because adjustment of economic structures mitigates the economic and political impact of the sanctions.

Economic sanctions are usually defined as restrictions on customary trade and financial relations imposed by one or more countries against a target country, group, or individual for political and security policy purposes. Most existing studies of the effects of sanctions and blockades, whether bilateral or multilateral, are conducted from the perspective of the initiating or 'sender' country, which is typically a great power, e.g., the United States. However, there is a lack of literature on the possible policies that target nations may develop to prevent compromising their security, especially economic security, as well as neutralize the negative impact of sanctions. Sanctions and blockades disrupt the flow of international trade in goods, services and capital. These have consequences for the composition of output, employment, consumption and investment, and may also exert substantial effects on households, firms and government expenditures in targeted nations. Thus, it is important to understand the effects of blockades and sanctions on economic growth and public expenditure on security, military, health and education. Apart from the long-run growth consequences of sanctions and blockades, many of the macroeconomic effects are likely to be relatively short-lived, decaying over time as the economy adjusts to sanctions. Therefore, econometric techniques applied to investigate the impact of sanctions should be able to capture the simultaneous interplay between economic outcomes, political factors and adjustment processes, as in reality economics and politics are inseparable.