Political Economy of Economic Growth

Nowadays it seems that studying the variables that are indicative of a stable political environment in models of economic growth، especially for developing countries that suffer from some degree of political instability، is necessary. This paper examines the relationship between political stability and economic growth in Iran during 1974-2007. This paper defines eight political stability or instability variables. In a five-variable model of the economic growth، two variables of political instability and three variables of the political stability are used. This model could also tested by new indices. The results show that in group A which is a combination of political and citizenship freedom، these two indices weigh equally but in group B which is a combination of three variables، private investment have greater intensity than trade freedom and tourism section. In the next years the effect on this group will increase and this is nature of economical factors.