Explaining the Political and Governmental Obstacles of Productive Private Sector Investment in Iranian Economy Using the Hodgson Institutional Approach1

Productive investment is one of the main variables of macroeconomics. Creating favorable conditions for formation and growth of productive investment is one of the essential requirements for the achievement of the country's economic goals, to fix issues and economic problems and increasing the political and economic power of the Islamic Republic of Iran. In this study, using Hodgson's institutional approach, the main problems and obstacles in the political system and governance structure in the process of formation of productive investment by the private sector is identified and analyzed. In Hodgson's theoretical approach, the existence of dichotomies and contradictions is the factor for the formation of social evolution and economic change. The institutional and environmental conditions of community indicates that these dualities lead to the development or rebound of the community. In this study, four institutional contradictions in Iranian economy have been investigated. These are the preference for short-term programs on long-term plans, the existence of contradictions in the structure of bureaucracy and sovereignty, the value-ideological decision-making and the destructive competition of the commercial sector with the industry sector. Then, their role and influence on economic productive investment are investigated. The study of the contradictions formed in political background and governance structure of the Iranian economy shows that the investment climate in the Iranian economy is inadequate and this has led to the continued economic downturn.