Institutional Sectors in the Iranian Economy and the Necessity of Structural Reform at the Institutional Sectors in the Economic Development Plans

One of the issues of concern for the economic policymakers of developed countries as of the 1980s was the devising of accounts that are indicative of financial and income flows between institutional sectors of the economy. Previously، due to the lack of information، annual allocation of resources to various institutions was performed inefficiently. Moreover، financial and income resources were either posting surpluses or running deficits. As a result، resources were wasted and the objectives of policymakers could not be achieved. Therefore، the System of National Accounts 1993 (SNA 93) and its revised 2008 version put a special emphasis on the «institutional approach» in addition to the «functional aspects». Based on institutional sectors'' data released by the Central Bank، over the recent years، in the formulation of past economic development plans، the reciprocal relationship among the 5 major institutional sectors including non-financial corporations sector، financial corporations sector، general government sector، household and non-profit institutions serving the household sector، and rest of the sectors has not been duly taken into account. This has led to the imbalanced growth in sectors which has in turn hindered the actualization of the objectives of economic plans. This article tries to analyze the behavior of each institutional sector in the framework of the Iranian economy based on the major current account balancing items namely; value added، operating surplus/mixed income، gross primary income، disposable income، and savings during 1375-1386 (1996-2008). Meanwhile، shares of institutional sectors in the Iranian economy are compared with the European countries based on which necessary recommendations are given for the formulation of future economic development plans.