Iranian politicians would be able to prevent any mistakes in the field of the economy if they would focus on the theories such as “behavioral economics” or “institutional economics”.
However, as the country’s economic situation shows, the officials seem to be illiterate in the field of economy, and the amazing thing is that they do not accept their illiteracy and make decisions that are devastating the economy more than ever. Sometimes they do not even understand simple economic issues. Many of the officials did not understand even the difference between “job opportunity” and “occupation”.
This is nothing new and can be constantly seen from Mohammad Khatami’s government to Mahmoud Ahmadinejad’s to Hassan Rouhani’s and is now inherited by the new government whose president has the record of only six classes and was busy with executions and human rights violations therefore we should not expect something else than a disabled economy.
These are not hollow charges but can be seen in their many interviews and speeches. The other part of the government does not show any interest in the field of the country’s economy except the corruption and looting.
The Friday Prayer’s Imams, who are becoming the main artillery of the production of uncertainty and instability on the horizon of the country’s political economy, sometimes do not know the difference between ‘subsidies’ and ‘computers.’ (In Persian the pronunciation of these two words is close to each other “Yaraneh (Subsidies) and Rayaneh (PC)”).
Mahmoud Ahmadinejad said that he had created two million jobs annually. He was right by auctioning the country’s wealth and resources, he created many “job opportunities” but the complete amount of the “occupation” over his eight-year tenure was not even close to six months in creating “occupation” of the previous government.
From the economic situation, it can be predicted that most of the regime’s officials are not informed about the subject of “Transaction Cost” and how it is affecting the country’s economy by heating it first to the ground and secondly it will heat the political system to the ground.
And it can be assumed that the head of the judiciary as the main institution of dealing with the transaction costs has not even heard such an expression.
Now the “Transaction Cost” in Iran is so increasing that it has taken the breath of the economy and eventually has stuck it and turned Iran into an anti-development country.
If this regime would be put a little more attention on the transparency and law-abiding and protection of people’s property rights, its benefits would be more of the country’s economy, than the wasted money one road and dam creations, iron, and petrochemical industry. But all of them are the victims of institutionalized corruption.
The situation has deteriorated indescribably. If you want to know the depth of the disaster, consider this comparison:
The total value of the country’s stock exchange has been announced at around 320 trillion Tomans over the past weekend.
Estimates of last year show that about 250 trillion Tomans of the people’s assets have been grounded in the judiciary.
This estimate, of course, is accompanied by errors, as accurate information about the cases is not published by the judiciary, therefore this estimate is collected from unofficial sources.
With each economic case entering the judiciary, a portion of Iran’s national assets will be undecided until a court verdict is issued. All the costs resulting from the uncertainty of people’s assets in the judiciary are part of the ‘Transaction Cost’, and of course, all other public institutions produce more or less ‘Transaction Cost’, which now are damaging Iran’s economy.
That is not the worst part of the story; the worst part is that because of the enormous corruption combined with these uncertain and undecided ‘Transaction Costs’ there is a high amount of capital flight, and no one can predict how things will end up.