The Effect of Economic Sanctions on Income Inequality in Iran; with Emphasis on Oil Revenues

Economic sanctions are a common diplomatic tool for countries to pursue political demands abroad or to punish non-aligned countries. Economic sanctions have been criticized for failing to achieve their goals and negatively impacting areas such as human rights, democracy, poverty, health care and basic living conditions. Sanctions imposed on Iran have affected various aspects of the economy, in terms of consumption, revenue, production, import of goods and services, and so on. This study examines the history and effects of economic sanctions on income inequality in Iran imposed by the United States during the period 1978-2018 using the Distributed Interrupt Autoregression (ARDL) method. Therefore, in this study, changes in oil revenues have been used as an indicator of economic sanctions. The results show that economic sanctions have different effects on income inequality in the short and long term. Also, the variables of foreign direct investment, inflation rate and degree of trade openness have a positive and significant effect on income inequality.