A Study on Impact of Government Size on Human Development Index, Three Decades after the Revolution

This paper aims to study the effect of the government size on human development index over the last three decades in post-revolutionary Iran. Since during these decades the government expenditures have inclined to increase, there has often been a notion among some scholars that the welfare nature of the government has intensified. This has seemingly enforced the idea that the increase of the government disbursements has resulted in the enhancement of human development index in Iran. Nevertheless, the findings of this study, based on econometric models, indicate that despite the fact that the increase of capital expenditures has had a positive effect on the country’s human development index, from the point of view of growth in consuming (current) expenditures, not only it has had no positive or reasonable effect but has had negative effect on the index. In addition, findings indicated that governments in Iran do not follow from the budget models recommended by UN and the government claim pertaining the improvement of people’s quality of life has only been a slogan. Furthermore, the study concludes that other factors like the growth of population has affected the increasing trends of the human development index that should be taken into account in the analysis.