The Different Patterns of Revenues and Expenditures in MENA Selected Countries with Emphasis on Iran

Document Type : Review Article

Abstract

The perception of the relationship between revenues (taxes incomes) and government expenditures is an important issue in the implementation of government programs and the effectiveness of the government stabilization, distribution, and allocation policies.Therefore, establishing a balance between government revenues and expenditures is important for most countries.  In this paper, the relationship between revenues and government expenditures in the framework of hypotheses revenue-expenditure, expenditure-revenue and synchronization for MENA selected countries including Iran have been studied. The results from the estimation of panel data models show that at first; taxes influence government expendituers in under review countries including Iran directly. That confirms the role of taxes in financing government expenditures. At second; government expenditures is an expalanatiry variable of taxes. In this regard, as taxes form part sector of firm’s production costs; increasing taxes following raising expenditures, affect economic growth and business negatively which clearly is not in line with the sixth development plan. Also, the results show that there is a unidirectional causality between gross domestic products and the government expenditure that confirms Wagner's law in MENA countries.

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Quarterly Journal of The Macro and Strategic Policies
Volume 6, Issue 22
August 2018
Pages 141-160

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