The relationship between political competition, economic growth and oil revenues in Iran’s provinces

The literature of political economy emphasizes the role of political institutions in controlling the behavior of politicians and economic choices. Political institutions include the arrangements established in the ruling political structure such as elections, parliament, government, laws, etc, in which, the political competition is one of the most important descriptors of the mentioned structure. This competition for political power, such as the candidacy of candidates for the parliamentary seats, will include the right to control, shape the content, and guide the public policy. Except the institutional factors, the natural resources abundance such as oil will affect the economic performance of countries dependent on the generated proceeds. Therefore, the present study examines the impact of political competition and oil revenues on the economic growth of Iranian provinces using the dynamic panel data method in the period of 2000-2019. The results show that, there is a non-linear relationship between the political competition and the U-shaped economic growth in various contexts, so that after the desired level of political competition, increasing the political competition forces politicians to formulate growth-promoting economic policies. The interaction of political competition and oil revenues on the economic growth of regions is positive, so increasing the political competition will moderate the destructive impact of oil revenues on the economic growth.