Seminar paper from the year 2014 in the subject Economics - Macro-economics, general, grade: 1,0, Martin Luther University (Orientalisches Institut), course: Einführung in die Kulturgeschichte des Islam, language: English, abstract: Irans GDP growth rate is below average compared to other developing countries. It faces the same problems of stagnant or low growth and unemployment, which have become relevant for other natural (fossil) resource rich countries foremost in the 20th century as well. Economists have tried to explain this paradox. With the most prominent named by economist Richard Auty in the 1990's as "Resource Curse" or "Paradox of the Plenty". In short, it states that this resource abundance, paradoxically, does not fuel an increase in growth and a boost in wealth, but instead leads to overall underperforming economies.In this paper however, I will take a look at the different obstacles Iran had and has to face, including the Dutch Disease. I will argue that evidence to support this theory is weak. And that other factors are also relevant to explain the curse. Political institutions play a large role to contribute to, or to counter negative economic effects. I will also argue that rentseeking behavior of political actors is a relevant issue for the curse. And that the influence of the Islamic rule set shape the economic portfolios. Also, powerful monopolistic institutions such as the bonyads contribute to the inefficient and underperforming Iranian economy. Thus the Iran would not be a victim to the resource curse but rather her own perpetrator.
Henze
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