Economic Strategy

Economic Strategy

Developing a Fiscal Governance Strength Index through Budget Analysis: A Composite Approach (1991–2023)

Document Type : Original Article

Authors
Hassan Talebi 1
Hossein Samsami Mazrae Akhound 2
Zarir Negintaji 2
1 PhD Student, Monetary Economics, Shahid Beheshti University, Tehran, Iran.
2 Assistant Professor, Economic Development, Shahid Beheshti University, Tehran, Iran.
10.22034/es.2025.517741.1854
Abstract
The budget, as a key policy tool, significantly impacts Iran's macroeconomic variables. In recent years, the country's economy has faced a persistent challenge of budget deficits. However, evaluating the performance of annual budgets based solely on a single indicator, such as the deficit, may lead to inaccurate and misleading judgments, as other critical budgetary dimensions are overlooked. To address this, the present study aims to provide a more comprehensive analysis of the government's financial performance by designing a composite index that incorporates several key budgetary variables. This index, focusing on government expenditure patterns and revenue efforts, analyzes budget data from 1991 to 2023, which cover more than three decades. The findings reveal significant fluctuations in the index over the study period, with a notable decline in recent years. This downward trend indicates a reduction in the government's financial efficiency and underscores the need for a multidimensional analysis of budget performance, moving away from single-factor approaches.
Keywords
Iran's economy
Fiscal Governance Strength Index
Budget
principal component analysis

Subjects

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  • Receive Date 09 April 2025
  • Revise Date 27 May 2025
  • Accept Date 15 July 2025