Document Type : Original Article

Highlights

vestigating and analyzing the consequences of bureaucracy

in Iran's economic liberalization system

Abstract

Bureaucracy plays a significant role in the behavior of politicians, government officials and agents. Bureaucracy can always be a security for liberalization indicators and at the same time a threat to any of its variables in the event of corruption. The indicators of liberalization studied in this study are taken from the model announced by the Heritage Foundation under ten headings: trade policies, government financial burden, government intervention in the economy, monetary policy, capital flow and foreign investment, banking laws and Tax laws, wages and prices (plus subsidies), property rights protection, business rules and regulations, and informal market activity are introduced. The purpose of the present study is to analyze the consequences of bureaucracy in the liberalization system of the Iranian economic system with emphasis on these indicators, which explains the existing challenges with a descriptive-analytical approach. The findings of this study show that the economic growth of the country and the reduction of corruption, initially requires the reform of the administrative-organizational structure and the relevant rules and regulations.

Keywords: bureaucracy, public choice, indicators of liberalization, economic growth

Introduction

Bureaucracy, as one of the causes of corruption in the economy, has an undeniable effect on reducing economic growth. Bureaucracy can always be a security for liberalization indicators and at the same time a threat to any of its variables in the event of corruption. Examining issues related to bureaucracy and its effects on the structure of government is one of the important issues in the applications of public choice theory and basically tries to answer the question of how much the allocation of resources in the public sector and the dimensions of this sector reflect It is the will and preferences of the bureaucrats and to what extent will it come from the will of the people, politicians or interest groups? In fact, studies of this part of the theory of public choice are more to answer the various aspects of the question, what do bureaucrats want? Therefore, the analysis of the consequences of bureaucracy in the subject under study, first requires explaining the relationship between the theory of public choice and the application of bureaucracy.

The main question of the research is that each of the bureaucratic actors, including politicians, government agencies, brokers and operators or users of government services and even customers who seek to maximize their profits; How much can they affect the liberalization and economic performance of the country? The hypothesis corresponding to the main question of the present study is that at present "the laws and regulations related to liberalization with the focus on the implementation of economic justice, far from being influenced by the tasteful and personal decisions of the authorities, need a fundamental review." In this study, we will address the aspects related to the above question. Therefore, we will first provide a conceptual framework of bureaucracy and economic liberalization, and then, by stating the ten indicators of liberalization, we will have an analysis of the most important variables related to each of them, legal objections and the need to amend the relevant rules and regulations. The method of the present research is descriptive-analytical and the necessary information has been collected through libraries.

First speech: the concepts of bureaucracy and economic liberalization

First paragraph: bureaucracy

The term bureaucracy was first coined by Vincent Gromy in 1765. This word has a negative connotation today. When we talk about bureaucracy, the idea of paperwork, delays and confusions in offices, extravagant and useless administrative steps come to mind when in fact bureaucracy is a necessary part of modern life. Bureaucrats are the means of fulfilling the demands of the people, and the activity of government organizations is impossible without them.

But the great sociologist Maxober first realized the importance of bureaucracy in the early twentieth century. Since Weber's most important issue was modernity and modern rationality, he was forced to turn his attention to modern organizations. Weber realized that modernity is through modern institutions that embody modern rationality. In Weber's view, this is impossible except with the help of a factor called bureaucracy. Weber's view of bureaucracy and modern institutions was positive, although he enumerated some risks, but overall there was a positive view.

Second paragraph: economic liberalization

Economic liberalization is a relatively new term in the economic literature, dating back to the mid-twentieth century, when increasing government interference in economic activity became inefficient.

Since 1995, several indicators for liberalization have been defined and tested using experimental models, in this regard the "Heritage Foundation Index". In general, the Heritage Foundation has identified ten indicators for liberalization: 1) trade policies, 2) government financial burden, 3) government intervention in the economy, 4) monetary policy, 5) capital flows and foreign investment 6) Banking and tax laws 7) Wages and prices (plus subsidies), 8) Protection of property rights, 9) Laws and regulations related to starting a business, which include labor and living laws It also becomes environmental and 10) informal market activity. The mentioned indicators can also be used in applied liberalization studies.

In this topic of research, rather than seeking useful and efficient economic reforms, we seek to identify these variables and the causes and strategies to prevent their occurrence in the macroeconomic liberalization system of Iran. With this explanation, after briefly stating the theoretical foundations of economic liberalization and its process in the laws and regulations of Iran after the Islamic Revolution, we will recount the mental nodes of economic decision makers and express practical solutions to prevent corruption.

Speech 2: Liberalization in the Iranian economic system

Iran's economy had changed in the two decades leading up to the Islamic Revolution of 1978 in order to increase government intervention in economic activities, and with the advent of the revolution, this transformation entered a new and broader stage. The government's direct involvement in economic activities increased from the 1940s and covered almost all economic sectors, including agriculture and industry. With the beginning of the Islamic Revolution in 1978, the process of governmentalization of the Iranian economy accelerated; It should be noted, however, that this process was different from before. This time the government intervened in the economy not only by increasing expenditures in the general government budget but also by expanding government ownership of economic units and direct intervention in various markets. In the first years of the Islamic Revolution, large sections of the agricultural and service industry came under the ownership, ownership and control of the government and institutions affiliated with the revolutionary political power. The atmosphere of pessimism and distrust of the private sector, which prevailed during the revolution due to the dominance of leftist ideology, played a key role in weakening the private sector and governmentalizing the economy. In the interval between the victory of the Islamic Revolution on February 13, 1979 and the formation of the new legislature, the Revolutionary Council had the authority to pass government laws (resolutions). In the absence of the legislature, in the absence of the legislature, a large proportion of private sector property, rights and powers of firms and institutions operating in this sector are affiliated with the government and government-affiliated institutions or newly established institutions. Transferred to political power.

With this introduction, however, it seems that not all the challenges of Iran's economic liberalization can be addressed to the shortcomings of the legislative system, because in many cases, there are factors and variables that affect the executive system and especially the ruling bureaucracy. And departments arise. Therefore, in order to study these factors, based on the ten indicators of economic liberalization of the Heritage Foundation, the most important challenges of this institution have been criticized and analyzed from the perspective of the administrative system, and necessary solutions and solutions are needed to solve the existing problems. Is presented.

Speech 3: Bureaucracy and the Challenges Leading to Iran's Economic Liberalization

In each of the ten indicators for economic liberalization, there are factors and variables that can be effective at the level of liberalization. These factors vary according to the policies adopted in the economic laws and regulations of each country. The variables of these indicators can be effective in the occurrence of financial corruption, corruption of the judiciary, corruption in public services and other areas of corruption.

The most important aspect of liberalization is the government's refusal to manipulate the market mechanism, especially grammatical pricing and supportive policies. Therefore, in each of the index variables, an acceptable policy must be adopted to avoid inefficiencies. Be.

Factors and variables that are effective in the level of liberalization of Iran's economic system, but with the application of structural barriers and limitations, have always faced many problems can be expressed separately for each of the ten indicators as follows:

Paragraph 1: "Trade Policies"

One of the important factors in the trade policy index; High tariff rates are non-tariff customs barriers and corruption in customs services. According to Article 2 of the Law on Customs Affairs, the Customs of the Islamic Republic of Iran is a government organization subordinated to the Ministry of Economic Affairs and Finance, which plays a pivotal and coordinating role in the country's entry and exit points and is responsible for enforcing government sovereignty in implementing the Customs Law. And other laws and regulations related to the export and import and transit of goods and collection of import duties and customs duties and related taxes and technical requirements and trade facilitation.

Despite the fact that during the last two decades, many changes have taken place in the duties and missions of the country's customs, including the establishment of a comprehensive customs system and a single cross-border trade window, but the Iranian customs structure is always one of the traditional structures Suffers, on the one hand, the duty to impose controls, restrictions and legal prohibitions on it, and, on the other hand, the duty to create legal facilities and expedite the clearance of goods.

Second paragraph: "Government financial burden"

The influential variables in the "government financial burden" index can be found in the final rates of high and medium income tax and corporate tax. A comprehensive income tax program can increase the tax share of government revenues without putting additional pressure on a single group of citizens. Therefore, it is necessary for the Iranian tax system to meet the goals and tasks that the World Bank has emphasized to reform the tax system, especially in cases such as: reducing the tax burden on low-income households and strengthening tax management and simplifying tax laws and the system Consider information.

Article 3: "Government Interference in the Economy"

According to some economic experts; The problem of Iran's economy is not whether it is governmental or not; Rather, before that, the problem with Iran's economy is that the government has a strong presence in areas where it should not be present and a small presence in areas where it should be present. For example, in areas such as health and medicine, the government acts unconstitutionally through extensive privatization and liberalization in the health sector, while according to the constitution, health is excluded from the field. ‌ are the ones in which the government should have a large role and this does not mean the state economy. Also in the field of housing, which according to the constitution, providing shelter is one of the duties of the government; But we see that the government has abandoned this area and in some interim measures in some periods has not been able to solve the housing problem with an incomplete Mehr housing plan. In contrast, government interference in the production of products or its ownership of jobs and industries, especially in the automotive industry is a problem. Deviation in the economic decision-making and policy-making system in Iran stems from the fact that the authorities; Beliefs, tastes, and personal ideas form the basis of decision-making in favor of themselves or a particular group.

Article 4: "Monetary Policy"

Despite the fact that the experience of many countries has shown in practice that the existence of an independent organization in leading and managing fiscal policy can significantly increase its efficiency in the economy, but in Iran, there is structural fragmentation and policy decision-making. We are monetary and financial institutions, as the management of fiscal policy is entrusted to the Ministry of Economic Affairs and Finance and design and budgeting to the Management and Planning Organization, and the custodian of monetary policy is the Central Bank, which operates directly under the President. ندکند. To reform the country's economic structure, economists suggest managing the unit of expenditures in such a way that they believe that wherever the treasury is, the state budget should be adjusted there as well. Therefore, they believe that the Ministry of Economic Affairs and Finance, as the custodian of the country's fiscal policy, should also take responsibility for budgeting. Accordingly, it is necessary for the country's monetary policy to be the responsibility of the central bank with an independent structure, because the influence of the president has shown from experience that monetary policy is ineffective and, consequently, prevents price stabilization. And economic growth will be expected. Therefore, in order to avoid external pressures and the influence of stakeholders, it is necessary for the central bank to survive with full independence because the nature of monetary policy requires that it be independent of the influence of certain individuals or groups.

Article 5: "Capital Flow and Foreign Investment"

A study of the economies of developing countries shows that the effective role of foreign resources and capital in increasing production, providing employment, and maintaining and sustaining economic growth cannot be ignored. This type of investment, in order not to lead to monopoly or corruption, requires the adoption of appropriate policies in the field of political and economic relations and attention to some specific features in the relevant laws and regulations. Explain short-term or long-term goals in how to make investments, pay attention to political-economic independence, estimate return on capital over interest rates, pay attention to technology transfer, management, skills and expertise as priorities in investing ‌ Foreign companies and participation through the purchase of shares of domestic companies; They can be one of the acceptable factors in reducing potential losses during capital inflows from abroad.

Paragraph 6: "Banking and Finance Laws"

In Iran, in order to strengthen the financial system and create grounds for financial liberalization, the law of the Third Social, Economic and Cultural Development Plan, in the first step, with the focus on organizing the financial market and especially the banking system, part of the existing gaps by providing measures such as 1- Prohibition of government borrowing from the central bank and the banking system to compensate for the budget deficit 2- Creating a foreign exchange reserve account and 3- Issuing a license to issue participation bonds by the central bank to control liquidity; Has fixed.

It seems that the Iranian banking system still faces great challenges because of the abuses and large-scale embezzlements of recent years, most of which stem from the failure of laws and illegal relations and rents. Some officials have been with senior bank executives, and may still be. For example, in the Banking Law Bill, the Board of Governors is the highest authority for policy-making, regulation, and oversight of the implementation of laws in the Central Bank, and there is no correlation between the strict legal constraints on the members of this Board and compensation. There is no service to them. The same factor can re-inflict irreparable blows on the body of the Iranian banking system through similar holes. Also, the method of electing and dismissing the director general in the Supreme Board, which in practice is in the full power of the executive branch, makes the central bank's relationship with the executive branch the same as in other government agencies; Criticism previously leveled at the complete independence of the central bank.

Section 7: "Wages and Prices"

Liberalization and price controls, as well as pricing and subsidy rules that affect prices, are among the variables that determine the "wages and prices" index.

In the matter of subsidies; In Iran, market supporters have pursued price liberalization in the first, second, and third programs of economic, social, and cultural development. This group of economists, based on liberal theories, believe that if prices are released, consumption patterns will change, productivity will increase, and the economic system will be reformed in a gradual and, of course, automatic process. In contrast, another group of economists prioritizes privatization. According to their institutionalist thinking, the problem is the governmental structure of the economy, which even if prices are liberalized, the state monopoly does not allow reform and no other result is achieved except passing the price burden on to the people.

Article 8: "Protection of property rights"

In this regard, the discussion on the issue of "respect for property rights in the Constitution of the Islamic Republic of Iran" can lead us to the basic concepts of this right and cases of expropriation due to the above factors. Articles 22 and 47 of the Constitution of the Islamic Republic of Iran deal with the issue of respect for property.

It seems that, firstly, the issue of expropriation should be removed from the constitution, and secondly, in this regard, the laws related to Article 49 of the Constitution, which consider confiscation as a punishment and not a return of property, should be amended. Respect for inherent rights such as property should be enshrined in the Constitution so that it is not violated through the decisions of officials or even the ordinary legislature. And to be reformed because so far it has ruthlessly attacked the rights of the nation in matters such as confiscation of property and land acquisition as public interests.

Article 9: "Business Rules and Regulations"

First, in increasing the annual wage; And in the realization of tripartism, in spite of the emphasis of the International Labor Organization as well as the relevant laws, and in view of the bitter experiences of the past in the non-realization of real tripartism, which is a clear example of it in the Fourth Development Plan We also witnessed and ignored this principle in the Social Security Organization, despite the fact that more than ninety percent of the organization's capital belongs to workers and employers; It seems that it is necessary to review and amend the labor law in accordance with the legal documents. This necessity is reflected in Article 101 of the Law on the Fourth Development Plan of the proposed country: Paragraph (e) of this Article emphasizes the amendment and revision of labor laws and regulations based on a tripartite mechanism for greater interaction and flexibility in the labor market. Paragraph (g) of the same article stipulates the amendment of laws and regulations in order to bring national laws and regulations in line with international standards and conventions and global labor developments. In this regard, the approval of annual wages and salaries by voting without the consent of the workers' representatives (experience of 1399), although according to Article 5 of the Instruction on how to form and administer the Supreme Labor Council, the subject of Article (170) of the Labor Law has legal status, but this The resolution does not have the characteristics of tripartism. Therefore, it is worth noting that the realization of real tripartism in reviewing and amending the labor law, as well as the annual increase in wages and salaries, is first of all the government's task to move away from nationalism and pay attention to the tripartite approach in the Supreme Labor Council. And secondly, the participation of labor representatives in the drafting of the labor law reform bill and their agreement on the rate of wage increase is an undeniable necessity.

Article 10: "Informal market"

The informal economy is an irregular economy. In other words, from the point of view of the modern world, anything that cannot be controlled or understood is informal; It means something irregular, unpredictable, changeable and invisible.

What is more effective in increasing this type of economy in Iran than other factors is the role of bureaucratic actors in several factors: First; The problem is the country's large tax evasion. The influence of interest groups and the lack of tax exemption laws, especially in the macroeconomic activities of the country by some institutions and organizations, increase the tax burden on other taxpayers and intensify the informal markets. Because in the face of such discrimination, people seek to fill such gaps with informal activities. Based on this, it can be concluded that the type of economic relationship between the government and society has a significant role in moving the economy towards formal or informal activities. Second; The market without supervision is the allocation of government currency and the provision of credit for the registration of orders for the country's basic goods, which, according to official reports of budget disbursements, are either not imported at all or lead to the import of non-essential goods.

Result:

In this study, the consequences of bureaucracy in Iran's economic liberalization system are analyzed and the factors and variables that have been effective in the level of liberalization of this system, by applying structural and sometimes legal barriers and limitations, separately for each of the indicators Dozens have been explained and analyzed. Although in each of the ten indicators of Heritage, Iran's economic problems have been explained and analyzed, but the origin of each can be traced to the bureaucracy governing the structure and performance of the administration. Weakness of the customs supervision system, lack of maximum supervision over the application of tax exemptions, existence of personal tastes and ideas of officials in their favor or a specific group in regulating the economic decision-making and policy-making system, structural fragmentation and decision - Taking on monetary, financial and budgeting policies, not paying attention to management, skills and expertise as a priority in foreign investments, the existence of a flawed structure in the banking system, lack of accountability of officials to reform the subsidized justice system Lack of protection of individuals' property rights, monopoly of regulatory organizations such as the Competition Council and the Supreme Labor Council, and infiltration of the informal Iranian market without the supervision of bureaucrats and interest groups; All show the bureaucracy that governs Iran's economic system.

• Interdisciplinary studies