Medium Term Plans, Regulation Reforms and Economic Growth Performance in Iran

Determining the driving forces of economic growth has a paramount importance in economic studies. Early studies suggested physical capital accumulation as the main driving force of growth. However, the recent studies try to resolve the flaws of neo classical school on growth by expanding the concept of capital equipment and machinery to a wider range of human knowledge, on one hand, and institutions, rules and regulations as social capital, on the other. In fact, this strain of economics has become more prevailed recently. The present study, using Hausman, Pritchett and Rodrik (2005) methodology, aims to investigate the impact of rules and regulation reforms of developmental plans on the acceleration of Iran economic growth over 1338-1386 (1960-2008) period. The results of three econometric methods including Gombit, Logit and Probit models show that economic reforms of the developmental plans in Iran's economy has had a significant positive impact on growth.