The effect of quality of Institutional corruption and natural resources dependence on health in Iran

Iran has natural resources such as oil that can affect health; however, whether a natural source of oil can have a positive effect on health or not is a question for economists. In this study, we empirically examine how economic dependence on natural resources affects health with respect to institutional corruption.

The present study is an applied study with longitudinal analytical-descriptive method using smooth transitional regression method between 1984 and 2017. The research population in this study was the annual data of the whole country. Also, the dependent variable is life expectancy, and the main independent variables are oil rents to GDP. Other independent variables used include the corruption index, GDP per capita, and literacy level. Data analysis was also performed with Eviews software (version 12).

Results of the estimates showed that the effect of economic dependence on natural resources on health and corruption in Iran during the study period was inversely U-shaped. The estimated threshold for the share of oil rents in GDP in life expectancy was 3.070%. The results indicate that the corruption reduction index has a positive and significant effect on health. But GDP has had a negative impact on life expectancy.

According to the results of this study, in order to reduce the negative effects of dependence on natural resources, we recommend that appropriate policies such as attention to other productive sectors and strengthening other economic infrastructure to reduce dependence on natural resources should be applied in order to improve existing conditions in the country. Considering the positive effect of reducing corruption on health, we also recommend that appropriate policies should be implemented to improve the institutional quality.