The Role of Government Health and Education Expenditure on Economic Growth in Iran and OPEC Countries

Abstract

E conomic growth is one of the goals of development in the economic plans of every country. Achieving self-development in OPEC member takes precise awareness of the amount and cause of the impact of economic variables on each other and it is, determining the policies and efficient, appropriate strategies for each case. Among these variables, oil revenues, total government expenditure, government expenditure for education, government expenditure for health, and economic growth could be mentioned. An examination of the trend of changes in health expenditure in Iran shows up until 2011. After that, there has been a leap in these expenditures. The share of government education expenditure in the total government budget in Iran has been showing a steady decline in these expenditures. panel data, we study the relationship between health expenditure and education expenditure and economic growth in OPEC countries and Iran from 2004 to 2016. Hence, the panel data method has been applied to estimate models and the panel VAR method has been applied to examine the causality relationships between variables. The results show a positive meaningful relationship between oil revenues, total government expenditure, government expenditure for education, government expenditure in health, and economic growth of OPEC countries and Iran. Furthermore, the result of the Granger Causality test suggests that there is a practical, mutual relationship between oil revenues and economic growth, total government expenditure and economic growth, and also a practical one-sided relationship of economic growth with government expenditure for education and also one-sided relationship of economic growth with government expenditure for health in OPEC countries and Iran.