The Effectiveness of Public Policies in Reducing Poverty In Iran

Poverty has been one of the main issues among economists, politicians and social scientists in different countries. Poverty alleviation is considered as the main objective of economic development. Undoubtedly, the objective of providing social protection by government is to reduce poverty and to increase the welfare of the people. Without increases in efficiency and productivity, none of the economic systems can improve the living standards. Improving the economic performance of the government is a common objective of all economic systems. This paper examines the effectiveness of the government's economic policies on reducing poverty, provides a snapshot of the size of the government's performance in reducing poverty and determines factors affecting policy effectiveness regarding resources available during 1983 to 2012. This paper uses the Stochastic Frontier Analysis (SFA) in order to calculate efficiency of poverty-reducing policies. The results indicate government efficiency in poverty reduction by 69 percent. Outstanding bank loans, inflation rate and unemployment rate have significant positive impacts on the level of technical inefficiency.