Classifying regional development in Iran (Application of Composite Index Approach)

The spatial economy of Iran، like that of so many other developing countries، is characterized by an uneven spatial pattern of economic activities. The problem of spatial inequality emerged when efficiency-oriented sectoral policies came into conflict with the spatial dimension of development (Atash، 1988). Due to this conflict، extreme imbalanced development in Iran was created. Moreover spatial uneven distribution of economic activities in Iran is unknown and incomplete. So، there is an urgent need for more efficient and effective design، targeting and implementing interventions to manage spatial imbalances in development. Hence، the identification of development patterns at spatial scale and the factors generating them can help improve planning if development programs are focused on removing the constraints adversely affecting development in potentially good areas. There is a need for research that would describe and explain the problem of spatial development patterns as well as proposal of possible strategies، which can be used to develop the country and reduce the spatial imbalances. The main objective of this research was to determine spatial economic development level in order to identify spatial pattern of development and explain determinants of such imbalance in Iran based on methodology of composite index of development. Then، Iran provinces were ranked and classified according to the calculated composite index. To collect the required data، census of 2006 and yearbook in various times were used. Theoretical bases: Theories of regional inequality as well as empirical evidence regarding actual trends at the national or international level have been discussed and debated in the economic literature for over three decades. Early debates concerning the impact of market mechanisms on regional inequality in the West (Myrdal، 1957) have become popular again in the 1990s. There is a conflict on probable outcomes between the neo-classicalists and structuralists. The neo-classicalists، optimistic about market forces، regarded regional inequality as a passing phase and postulated that market forces would ensure that the returns to all factors of production would approach their marginal products. Regional inequality initially arises in the process of the allocation of resources، but factor mobility and efficient market forces would eventually ensure regional equality (Smith، 1975); although a prerequisite of efficient markets is the existence of fully competitive markets، which are not present in most developing countries. Similarly، the inverted U hypothesis predicts that regional inequalities within developing countries will eventually be reduced through factor mobility. In contrast، the structuralist school of dualism postulates that regional inequality is an inevitable outcome of capital accumulation and profit maximization and that market forces tend to increase rather than decrease regional inequality. Myrdal’s (1957) circular and cumulative causation thesis proposes that the creation of a favored region may have its origin in a historical accident، but there is a natural tendency for all economic activities with higher than average returns (such as industry، commerce، banking and insurance)، know-how and all the social amenities that go with these، to cluster within such a core region with backwash effects on unflavored regions. There may be some centrifugal spread effect (like trickle-down effects)، but these do not point to the achievement of equilibrium. On the contrary، “even in a rapidly developing country many regions will be agging behind، stagnating or becoming poorer; and there would be more regions in the last two categories if market forces alone were left to decide the outcome” (Myrdal، 1957،p. 32). In order to measure spatial development، composite index is developed based on nine phases method including: Selection of Indicators، Grouping Selected Indicators، Validating Indicators، Judging the Indicators، Transforming the Indicators، Normalizing the Indicators، Weighting the indicators، Calculating the sub-indices and Combining the sub-indices into the Composite Development Index. In this research، 41 indices in which data were available were used and grouped in three categories including: social، population and cultural (14 indicators)، economical (13 indicators) and infrastructural and service (14 indicators). Calculated weights for development components revealed that infrastructural and services and economical components have more weight to spatial disparities analysis of development. The results of calculated composite index for social، population and cultural group showed that Tehran، Guilan and Mazandaran are ranked in the first position. In this context Kordestan، Hormozgan and Sistan-Baluchestan are at the bottom of ranking scale. Economical composite index results indicated that Khuzestan، Esfahan and Markazi are top and Lorstan، Kohkiloyeh-Boyrahmad and Sistan-Baluchestan are bottom of ranking scale. Based on composite index of infrastructural and services، Semnan، Qom and Esfahan have the highest rank and North Khorasan، Lorestan and Sistan-Bluchestan have the lowest rank. According to final calculated composite index، Tehran، Semnan and Esfahan were ranked in the first position and Kohkiloyeh-Boyrahmad، Lorestan and Sistan-Bluchestan were ranked in the last position. The spatial pattern is divided into three development categories: high (9 provinces)، medium (16 provinces) and low (5 provinces)، based on Geographical information system (GIS). Such pattern confirms core-prophecy in Iranian spatial economic development. Suggestion: Decentralization policy and giving more attention to less developed province such as Sistan-Baluchestan. - Development of regional markets، supply networks and export in less developed provinces. - Improvement and development of infrastructural service especially transport system in periphery areas. - Development of commercial and industrial cropping system to save non-renewable resources. - Extending and strengthening cooperation between stakeholders of planning in national level. - Formulating policies aimed at reducing regional inequalities and population concentrations in the urban areas of a few richer.