mohammadjavad sharifzadeh

The social welfare system and the tax system, due to their redistributive role, have an important place in the issue of social justice and are one of the pillars of the movement towards a social and economic system based on justice. In Iran, based on the teachings of the Islamic Revolution, social protection policies have always been part of the concern of the governing system, but still, the current state of the support system and inequality indicators in the country are far from the desired point..The implementation of the personal income tax system and its connection with the welfare system in the form of a comprehensive social assistance model such as a refundable tax credit can significantly help to reduce inequalities and improve poverty indicators in the society. The main issue of this research is to investigate and identify the obstacles to consolidation and integration of the social assistance system and the tax system based on the Refundable Tax Credit (RTC) scheme. For this purpose, the required qualitative data was collected through semi-structured interviews with experts, and then, thematic analysis method was used to analyze, evaluate and classify the collected information. The findings show that there are several challenges for the implementation of an integrated support-tax system based on a refundable tax credit, which is the implementation of the personal income tax system, annual accounting period, the lack of complete information on income and expenses, especially for the poor, the lack of information provided by the governing entities, the unwillingness of the social assistance institutions for consolidation and integration, inertia in the country's tax and executive system, technical and operational complexities, and finally the weakness of the tax culture are the most important. The policy recommendation of this research includes the formation of the governance of Iran's social assistance system based on refundable tax credit and the creation of coordinated and aligned procedures and processes between the social assistance system and the tax system under the supervision of a sovereign trustee institution. Of course, there are technical and structural obstacles and challenges for the establishment of such a system, and the requirement of implementing an integrated support and tax system is to remove these obstacles as much as possible and meet its requirements and prerequisites.

The field of law and economics has been an integral part of the economic discipline since the mid-1900s. However, in Islamic literature, this historical connection can be traced back centuries. The author of “Law and Economics in Islam: An Introduction to Economic Analysis of Islamic Legal Institutions” aims to highlight the long-standing relationship between Islamic legal institutions and the construction of economic reality. The book delves into the role of these institutions in reducing transaction costs and evaluates their impact on economic institutions, particularly the market, at the beginning of Islam from both a historical and analytical perspective.

Nowadays, it is thought that there are only two approaches to political economy: public finance and public choice; however, this research aims to introduce a new insight by investigating scholastic sources. We study the relevant classic books from the thirteenth to the seventeenth centuries and reevaluate the scholastic literature based on public finance and public choice doctrines. The findings confirm that the government is the institution for realizing the common good according to a scholastic attitude. Therefore, scholastic thinkers saw a typical government mission based on their essentialist attitude toward human happiness. Social conflicts and lack of social consent are the product of diversification in ends and desires; hence, if the ends of humans were unified, there would be no conflict of interest. Accordingly, if the government acts according to its assigned mission, the lack of public consent is not significant. Based on the scholastic point of view, this study introduces the third approach to political economy, which can be considered an analytical synthesis of classical doctrines.

Pricing The structure of Iranian financial systems is based on banking loans and credits. For this reason, Iranian commercial banks maintain the monopoly over supplying credits to various sectors. Furthermore, together, they establish the biggest financial system in the economy. Due to the recent widespread banking crises in many countries, including Iran, and their impacts on their economies, studying banks' balance sheet problems at the time of these crises is crucial. Within the framework of a dynamic stochastic general equilibrium (DSGE) model, this research explains the crisis in Iran’s banking system and its effects on macroeconomic variables. Specifically, this is done by estimating the limits of fictitious assets of the banking system and calculating the balance sheets insolvency. Banking crises are usually characterized by two characteristics, a) major issues in the banking system, like depositors’ rush to withdraw money from banks and severe losses of the banking network, and b) ensued bankruptcies. The government has interventions in the face of losses of the banking network. The first case, which is termed as bank run and liquidity crisis, is caused by depositors’ rush to withdraw from the bank or any other situations in which the bank is unable to honor its obligation to its depositors. The second case is balance sheet crisis. This is an asset-liability gap in which the difference between a bank’s debt value and assets value exceeds the bank’s capital value. This research explores the latter issue.

The purpose of this study is to design an applicable model in macroeconomics so as to investigate the effects of balance sheet crisis on the main macroeconomic variables for Iran’s economy. A DSGE model is used for this purpose. The main structure of the model has been designed using the works of Deeb (2008 & 2010), Agnour et al. (2012), Kandak (2012) and Ahmadian (2014). The most important difference is the expansion of the banking model for the specific conditions of the Iranian banking system and the inclusion of balance sheet crisis as an imperative fact in the structure of that banking system. The model covers six sectors including household, firm, government, bank, oil revenue, and monetary authority. As mentioned, its distinctive feature is the application of a balance sheet shock through its most important component, namely the default of bank loans and its effect on macroeconomic variables such as production, investment and inflation. The shock of non-performing loans is modeled as a white noise shock. The white noise shock is also consistent with the behavior of delinquencies in the country's banking system. Given that the frequency of default events is very low compared to the number of loans and that defaulters have very different characteristics and considering that each loan default event occurs in different macroeconomic conditions, the default events should inevitably be considered as independent shocks.

The effect of the balance sheet shock on the deposit market is the same as its effect on liquidity, first decreasing and then increasing. Given that this model also takes bank rush into account, the occurrence of imbalances causes public panic and reduces the amount of deposits. From a microeconomic point of view, the depositor's fear reduces the household's desire to keep money. This drop in the deposit supply causes a sudden increase in the interest rate on deposits and, in turn, increases the bank's financial cost. Thus, banks' resources are under pressure due to the balance sheet shocks from two perspectives, namely a) a decline in cash inflows from the repayment of installments and b) an increase in interest rates on household deposits. The corresponding effect of an increase on the cost of capital for the firm is the reduction of return on investment. The financial theory of the firm suggests that financing through borrowing, due to its leveraged nature, increases the return on investment. In contrast, the use of internal financing and the firm's own capital reduces the return on investment. The decline in the offered credits, due to the balance sheet shock, forces healthy firms to replace bank financing with internal financing. Firms that are in default also de-leverage their balance sheets to repay their loans and prevent bankruptcy. These two effects, as discussed in the studies of Cristiano et al. (2007), Sons and Exo (2013) and Barzina and Makarkaski (2011), simultaneously reduce the level of capital and return on investment.

Conclusions and policy implications: 

The occurrence of a balance sheet crisis disrupts the cash flow of the bank. As a result, it becomes difficult to provide resources for loans. In response, the bank compensates for its resource deficit by increasing interest paid on household deposits, which creates money and increases the money supply. Given that money supply belongs to households, a surge occurs in the impulse reaction function of household liquidity. This is a closed model of economy, which means household consumption and investment as well as firm and government expenditures constitute the demand of the whole economy. As such, the first effect of an increase in household’s liquidity is an increase in the total demand of the economy and inflation. As the impulse reaction functions suggest, consumption is greatly increased, which corresponds to an increase in inflation. The total effects of balance sheet shock on the macroeconomic variables of the country in this model have two important results. The first is a sharp drop in economic growth due to a balance sheet crisis. The second result is the rise in economic fluctuations and subsequently higher uncertainty.

Economic democracy is considered as one of the main components of resistive economy. Among the general policies that have been announced so far, the general policies of Article 44 of the Constitution are most closely related to the democratization of the economy, and therefore its study is important from the perspective of the economic democracy. In this research, these policies have been studied from the perspective of economic democracy with a qualitative case study method. For this purpose, first a definition of economic democracy is presented, according to which the priority in democratization of the economy is that the supply of goods and services is done by the private sector and social economy, and the public sector is allowed to enter economic activity only if those two sectors has failed. Regardless of this prioritization, democratization of the economy is done in three axes of ownership, management and sharing and in two levels of macroeconomics and firms. Based on this concept of economic democracy, the general policies of Article 44 of the Constitution have serious shortcomings, and considering the implications of other principles of the Constitution for the democratization of the economy, it is suggested that general policies for the democratization of the economy be formulated.

The Iranian government has revived banks and credit institutions by using public resources and borrowing from the CB under the "bail out"; But this method puts the pressure on all people. The present study has studied the jurisprudence of the tool of "bail-in". Bail-in is a tool that, absorbs the losses incurred in the debt column of the bank balance sheet, and converts part of the existing liabilities into bank shares. The method of jurisprudential study is multi-stage Ijtihad; According to this method, after examining the financial relations under the relevant jurisprudential topics, the research results were presented to 6 members of the jurisprudential-economic elite and the central research questions were consulted by 8 imitation authorities and the research result was approved by the majority of elites and scholars. The first result of this research is that in current and savings deposits that have the nature of Al-Qarz, the value of Al-Dain can not be forcibly reduced under any jurisprudential title, whether it is "Ibraa Al-Dain" or "Al-Hajr". The conversion of Al-Dain into shares also requires the "consent of the parties." Therefore, it is necessary that both central issues of the means of Bail-in, namely the coercive reduction and coercive conversion of religion, be stipulated in the contract. In case of long-term deposits that have the nature of a Al-Vakalat, whether the property of the subject of the power of attorney has been or has not been destroyed, in case of bank bankruptcy, it is not possible to reduce the bank liability. The solution to this problem is that the bank must condition the reduction and conversion of the obligation while concluding a power of attorney for long-term deposits.

This study examines how the early scholastic thinkers dealt with the issue of the value of money and also its theoretical teachings with Analytical-library method for the study of Islamic economic. The results of this study show that money was significant for scholastic thinkers both from a moral and teleological perspectives and therefore became an analytical subject for them. Accordingly, scholastic thinkers developed three doctrines of chartalism, metalism, and combined approach in relation to the value of money. Based on the findings of this study, paying attention to the thematics of economic institutions can help in the dynamics of religious thought in the application of religious norms on new topics. Also, using the teleological method in the thematics of economic institutions provides the necessary ground for harmonizing thematics with religious norms. On the other hand, the need to pay attention to the dynamics of economic institutions over time to avoid simplification in analysis is one of the other implications of the analytical approach of school thinkers to the issue of the value of money for the study of Islamic economic.

So far, different interpretations of scholastic tax theory have been made. Some of them emphasized the adoption of utility approach and others emphasized the adoption of the ability to pay approach by scholastic thinkers. However, it seems that none of these interpretations have been able to address the scholastic tax theory in a comprehensive assessment by examining all angles of the theory. Accordingly, this study seeks to resolve the apparent conflicts by re-evaluating the scholastic tax theory and presenting a new interpretation of this theory. Our findings reveals that the main root of conflict goes back to the understanding of the society as an analytical unit of tax theory. As a result, the scholastic tax theory can be evaluated as an analytical synthesis between the classical approaches of taxation. Accordingly, taxation in a utilitarian attitude is an implicit contract between society and the government, and as long as governments pay attention to the common goods, society will be obliged to finance the government. But the share of each member of the community in this public payment is not the same. In this regard the ability to pay approach determines the share of each member of society.

Banking crises have been widespread in recent decades in different countries and have incurred significant costs to economies. Banking crises are highly disruptive events which lead to sustained declines in economic activity, financial intermediation, and ultimately in welfare. It is then no surprise that academics and policymakers devote significant efforts to develop models to attempt to predict crises and to design policies to resolve them and mitigate their economic impacts. Due to the weakness of other financial institutions in country, the banking system is one of the main institutions which has particular importance in Iran`s economy. Financial markets persistently confront with fluctuations in assets such as housing, gold and foreign exchange where these assets are often considered as a substitution for household deposits. Because these deposits are regarded as the most significant banks’ resources, an analysis of resource shortage impact on banks’ lending power on the one hand and the effect of lending power on macroeconomic variables such as output and inflation on the other hand makes it very important. Therefore, Banking system challenges cause substantial effects on the economy, especially if it is affected by the balance sheets crisis, it doubles its significance. This research, will explaining the crisis in the banking system of the country and its dimensions. By estimating the limits of the fictitious assets of the banking system of the country and the estimation of the balance sheets insolvency; within the framework of a model dynamic stochastic general equilibrium reviews its effects on macroeconomic variables. The results show bank loss impact growth negatively through decline in capital formation, raise in inflation and increase in firm’s capital and labor costs. It increase economic volatility respectively.

Scholastics were a group of Christian theologians who were mainly active in Europe during the 12th to 17th centuries. One of the notable teachings in scholastic literature is the theory of just price, which can be considered one of the most frequent theories in the history of economic ideas. This study tries to reassess the theory of just price in the economic thought of scholastic thinkers by referring to classical scholastic texts, through which it examines the general experiences of scholastic theology in confrontation with economic phenomena. For this purpose, the theory of just price is examined from the roots of its formation in scholastic practical wisdom to its most superficial form as an economic institution. Through this investigation, the question that how theology can play a role in its practical field, up to the most superficial economic institutions can be answered. The results of this study show that scholastic thinkers in the theoretical field of practical theology had significant achievements in promoting theology through their writings and teachings in schools. And in its practical field, they tried to implement theology in the human foundations of society by building various divine institutions such as a just price. In this regard, the theory of dual human happiness in scholastic theology has had a significant impact on the formation of economic issues as part of scholastic practical wisdom. Despite these achievements, their thought is wanting from two aspects: (1) systematic lack of understanding of modern phenomena such as capitalism and (2) no effort to implement their teachings in the social and economic construction of society.

The study of the role of government in the school of German Ordoliberalism in order to be considered as an alternative to the neoliberal capitalist system after the global crisis of 2008 and influencing the development model of West Germany after World War II and its effects on the model of EU governance and some other countries are important. The purpose of this article is to review, evaluate and critique the analysis" of works produced and translated into Persian in this field. some suggestions were made as follows: citing sources and first-hand thinkers of this school, distinguishing between similar concepts, correcting in-text references and equations Making specialized reforms, using valid analysis methods, paying attention to the foundations of ontology, anthropology, arithmetic, and ethics and its effect on the role of the government in this school and its critique from an Islamic perspective, and finally paying attention to different dimensions of the role of the state in this school, including the role of the economic constitution, social policy, and finally the presentation of an analytical model of concepts related to the role of the state and the relations and interactions between them.

Establishing the Individual Income Tax System can play a pivotal role in tax reform in the country. This tax system has never been implemented in Iran. The problem with the process of establishing PIT is, the uncertainty about the characteristics of the actors, their pattern of interaction, the amount of information and access, and the institutional and exogenous factors that govern the decisions made in this regard. In this study, the Institutional Economics Approach was chosen as a solution to this dilemma and the Institutional Analysis and Development framework (IAD) was used as the basis for its analysis. The findings of the study indicate that high-earning and low-earning actors differ greatly in terms of awareness, growth, access to decision-making centers, and action at the policy-making level. The present study predicts that under normal circumstances this tax system will not be approved and implemented unless exogenous factors, such as the pressure of sanctions, the demands of social activists, and the changing political climate of parliament and government, trigger a push for the enforcement of such a system.

International standards as well as global experience show that overcoming banking crises requires a wide range of financial instruments/methods that can be used for bankchr('39')s recovery without using public funding.The main question of the present article is to identify these instruments/methods and to examine their use in the case of state-owned and privatized banks in Iran according to local requirements (including religious considerations). For this purpose, the financial instruments of banking crisis management were listed and then by using the Delphi technique exposed to expert judgment in two stages. The results of the article show that in the current situation of Iranchr('39')s economy, it is possible to implement 9 instruments in state-owned banks and 10 instruments in privatized banks, without the need for major changes or modifications. Also, in case of providing institutional bases (through amending laws and regulations or making structural changes), it will be possible to use 2 other instruments in state-owned banks and 5 other instruments in privatized banks.

Nowadays, Iran monetary and financial market encounter a new concept, named “Resolution” that is going to be technically replaced with “Bankruptcy” system for facing failed or likely to fail banks and credit institutions. Dissatisfaction of policy and decision makers from bankruptcy system toward banks and credit institutions highlights the importance of “Resolution” in their eyes. Among all of the tools utilized under “Resolution” system, “Bail-in” is counted as one of the most challenging on the one hand, and the most useful tool on the other hands which is not only does open a new window in the realm of facing bank failure, but also comprehensively stands against “Bail-out”. This tool can be analyzed in two perspectives; an independent tool and the complementary one. “Bail-in” means “the mechanism for affecting the exercise by a resolution authority of the write-down and conversion powers in relation to liabilities of an institution under resolution”. As it is crystal clear, “Bail-in” includes two steps: loss absorption for “Write-down” and “Conversion” of liabilities to equity. Initially Considering “Bail-in” tool versus the rules of private law, most of the countries have carefully eliminates the impediments before applying this tool. In Iran legal system, originating from Shiite jurisprudence, this tool is not flawless. Islamic banking principles, Shiite jurisprudence rules, i.e. particularly “debt forgiveness” and “novation”, and lack of economic infrastructures are the major barriers before “Bail-in” tool, for which the authors have attempted to resolve them, in addition to explaining and clearing the issues, through descriptive-analyzing method.

The issue of failure and bankruptcy of financial institutions, especially banks, is one of the most complex legal-economic issues that has generally been addressed within the framework of the usual rules of bankruptcy in private law. The experience of financial crises, especially the crisis of 2009-2008, showed that failure and bankruptcy of banks and other important financial institutions could lead to financial and economic instability. Consequently, in recent years, the issue of financial stability has become one of the main goals of economic and social policy makers, and the special system of bank failure (the so-called Resolution system) has become a pivot point of financial stability, so that Many countries in the world have taken steps to create or develop a resolution system. This article, while introducing the resolution system, evaluates the legal system of Iran in terms of global standards in this field. The findings of the paper show that despite the fact that the legislator in Iran recognized the importance of the issue of bank failure and tried to partially divide the banks` failure arrangements from the failure arrangements for other firms, the establishment of a resolution system for enhancing financial stability and the strengthening of the economic system is urgent

The idea of the proper role of the public sector (the state) in the economy has been discussed from the ancient times and due to its importance has entered the educational programs of universities around the world. This paper introduces and critically analyses Jonathan Gruber`s Book entitled Public Finance and Public Policy. The book is one of the most recent textbooks in the field and is used as the main textbook in the public sector economics courses in many universities. The main strengths of the book are: fulfilling the formal standards of textbooks, up to date contents, the author`s emphasis on the practical and experimental issues of the public finance, its logical order and its very user friendly writing. But the book has some important shortcomings such as: its emphasis on the Pareto approach and neglecting alternative approaches such as the Rawlsian approach or the Amarya sen`s capability approach, lack of care to the historical approach and issues, neglecting non-liberal economists` theories (e.g. socialist theories), neglecting the specific issues of the public finance in developing countries and ignoring new scientific instruments and issues such as game theory and behavioral public finance.

How was the security provided in the Pre-Islamic Arabia? Economists recognize security as a public good that is provided publicly in most cases. But the northern pre-Islamic Arabia had no government. So how was the security provided in the PreIslamic Arabia in the absence of government? The historical facts – especially the popularity of trade in the region- show that its habitants could maintain an acceptable level of security using private rather than public mechanisms. In this security system each tribe played the role of a “club” which makes the security excludable and so a non-pure public good. There was also a set of security contracts among some Arabian tribes that was known as oath and khafarah. So using these mechanisms, the security was produced as a voluntarily provided public good. The weaknesses of this system were the high costs of contracting and enforcing the contracts. Hence the northern pre-Islamic Arabia needed a government that could provide the security with lower costs. We hope that this paper could expand our knowledge about pre-Islamic Arabia so as its political changes after the down of Islam.

The preparation of «the Islamic-Iranian Progress Model» is a purposeful effort to build a civilization based on the Islamic-Iranian identity. This paper has tried to show that this model could not be developed without reference to the wider socio-economic history especially the history of Islamic-Iranian civilization. It is based on the fact that no one can understand the patterns that rule different communities without referring to history. Muslims from third to fifth Islamic centuries reached a level of economic prosperity that European nations only achieved after some centuries. In this study we attempt to introduce this approach and show how to extract a valuable and dynamic progress model from historical valuable stocks. The results of this paper show that the preparation of the Islamic-Iranian Progress Model needs a change in the method of economic studies، the use of historical methods and applying the institutional approach to the history of Islamic-Iranian civilization.

In this paper this question is tried to be answered: How did the Islamic Contract Law affect transaction costs? Our first approach for answering this question is a historical approach which compares the prevailing contract laws in the Northern Arabian Peninsula before and after the dawn of Islam. In the second approach which is an analytical approach we explained the role of Islamic legal teachings in filling the gaps of incomplete contracts. For this reason we explained how the Islamic jurisprudential rules could fulfill the mission of the default rules. Also, by referring to the informational problems we described how the Islamic teachings had regulated contracts. We studied the prohibition of some contractual forms that privileged in the pre-Islamic era as an obvious example of Islamic regulation of contracts. The findings of the paper show that we cannot accept the hypothesis that asserts: "Islamic Contract Law did not decrease the transaction costs."

“The present paper seeks to answer this question that “what are contract enforcement mechanisms in the Islamic economics and how these mechanisms affect the enforcement costs?”. Because the judgment on enforcement costs depends highly on the context of time and place, our study is devoted to the early Islamic time in the Arabian Peninsula. Therefore, after dividing enforcement mechanisms into private and public, we will show that North Arabian Peninsula in that time had no government and so no official Judiciary system as the most important public enforcement mechanism. So the Arab had no choice except referring to the private enforcement mechanisms that were so expensive and inefficient. However some contracts were enforced by the means of self-enforcement mechanisms because of continuity and repeatedness. After the dawn of Islam, the judiciary system and Hisbah mechanism was instituted and so the public enforcement became possible in the Arabian Peninsula. Along with the public mechanisms, Islam encouraged Muslim society to use private enforcement methods. In addition, the Islamic moral teachings were the most important means of self- enforcement. This paper concludes that the Islamic enforcement mechanisms were efficient in regard to minimizing transaction costs. So the “Cost Efficiency Principle” may be seen as an Islamic jurisprudential fundamental. This rule has priority until it is not contrasted with the basic Islamic rules such as judicial justice, not referring to tyrant (Taghut) and justice.

The existence of a specific legal system, which precisely defines property rights and contract rights, can play an important role in reducing the Contracting Costs. Before the advent of Islam, Northern Arabian Peninsula lacked the Property and Contract Laws and, consequently, a specific legal system. Thus, the contracting costs in that era were high. The migration of the Prophet Mohammad (PBUH) to the Medina created a suitable environment for the introduction of the Islamic legal doctrine. However, the question is: whether the Islamic legal teachings could play the role of a specific legal system in reducing contracting costs despite the prohibition of writing hadith and consequently the verbal status of the Islamic legal teachings in the first century AH. However, we should not forget that in this century the legal verses of the Holy Quran were written and many of the senior and junior Companions (Sahabah) were alive and have determining role in managing Islamic courts, the facts that prevented a legal gap in the first century AH. Islamic legal teachings contain a wide range of legal issues, especially issues related to property rights and Contract rights. So by relying on the vast historical and jurisprudential evidence we can reject the hypothesis that “Islam did not design and introduce a specific legal system”.

In previous decades, the spread of the Coase proposition and coming to light of the economics of Ownership Rights, have made the necessity and possibility of economic analyses of legal principles and regulations, more and more obvious. The main question of this research is the manner in which the Islamic juristic rules, regarding ownership rights, influence the transaction costs. In the era before the rise of Islam, Northern Arabia was void of any particular legal system efficiently defining the ownership rights. As a result the costs of establishment and application of contracts were extraordinary. In such conditions it was expected that rise of a specific legal system, like the one of Islam, which defined and explained the ownership right on a very broad scale, will have an important role in reducing the transaction costs. While presenting a new categorization of the types of ownerships accepted in Islam, the current article strives to analyze three important subjects of Private ownership, Public ownership and Free Access Systems in the perspective of transaction costs, and discuss the effects of instruments, which support ownership, on the costs of execution of contract. The conclusions show that by relying on the available historical and legal facts, this hypothesis cannot be accepted: “the teachings of Islamic law did not result in a reduction of transaction costs, in the realm of ownership rights.