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Political Business Cycles in Hybrid Regimes: Analysis of Fiscal Policies in Iran

Sat, September 2, 2:00 to 3:30pm, Parc 55, Cyril Magnin III

Abstract

Using a time-series statistical analysis of government economic policies during the past four decades in Iran this article shows that when a hybrid regime is deeply polarized and there is a strong opposition vying for changing the status quo, legislative supervision over the budget decreases and the government engages in large political business cycles. The statistical results show that political business cycles in Iran have become larger since the rise of the reformist movement as the only viable opposition in the country. Furthermore, legislative supervision over the annual budget is significantly less for election year budgets. These electoral cycles have become more visible and significant since 2003 when all reformist candidates were disqualified from running in elections and the political and electoral clash between the ruling hardliners and the reformist opposition has become entrenched. Since then elections have become intense moments of contestation between hardliners who wish to monopolize power and the reformist movement which strives to change the status-quo. The case of Iran as an electoral authoritarian regime is instructive because the authoritarian nature of these regimes and constant abuses of power veils the rational decisions leaders in hybrid regimes take in order to ensure their survival. As such, understanding that beyond predatory rentier features or webs of patronage, leaders in electoral authoritarian regimes decide on specific economic policies to ensure their political survival, is very critical for understanding the causes of authoritarian durability.

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