Journal of economics and regional development

Abstract The Political Economy of Kermanshah Province’s Development Dilemma from an Institutional Perspective

Farhad Daneshnia Siavash Gholipour Seyyed Mohammad Bagher Najafi Gholamreza Badri Manesh
This study aims to address the question of why Kermanshah Province, despite its abundant natural resources, distinctive climatic and geographical conditions, human, cultural, and environmental diversity, and significant potential for agricultural and tourism activities, has failed to attain a satisfactory level of development. The theoretical framework of the paper is grounded in institutional political economy, drawing primarily on the theories of Douglas North and Oliver Williamson. The research employs a descriptive–analytical methodology, and data are collected using documentary sources. The findings indicate that the province’s development dilemma did not arise abruptly or at a single historical moment. Rather, it should be understood as the outcome of a long-term historical process shaped by institutional factors, including the reproduction of tribal traditions, state policies implemented over the past century, and persistent disagreements regarding the appropriate development strategy for Kermanshah Province. These three components have consistently maintained a central and reciprocal relationship with underdevelopment. Accordingly, institutional improvement and reform, through legal reforms, inclusive and comprehensive education, accurate identification of the barriers to achieving strategic consensus on provincial development, and systematic efforts to eliminate these barriers, can play a crucial and effective role in advancing the province’s development objectives.
Keywords: historical process; institutional factors; tribal traditions; state policies; divergence in development strategy

Introduction
Nevertheless, Kermanshah, in contemporary history – particularly from the Pahlavi period to the present – has diverged from its formerly favorable position when viewed comparatively with other regions of the country. Factors such as war, politico-military conflicts, and misguided governmental economic policies have played a central role in this regard. In recent years, based on key indicators of economic development – such as per capita income, unemployment rate, and the household savings ratio – Kermanshah has not enjoyed favorable conditions compared to other provinces (Statistical Center of Iran, Report No. 5236: 2022).
An examination of the historical fluctuations in the political and economic conditions of Kermanshah, together with the fact that the aforementioned territory has experienced periods of favorable economic performance as well as intervals marked by markedly different conditions – during which its economic indicators ranked at lower levels relative to other regions of the country – clearly demonstrates that genetic and climatic characteristics cannot account for these disparities. Rather, the roots of such political and economic divergences must be sought in other factors.

Research Method and Theoretical Framework

The method employed in this article is descriptive-analytical, and the data collection technique is documentary. The sources utilized include books, academic articles, the National Statistical Portal, the Customs Administration of the Islamic Republic of Iran, statistical yearbooks, territorial planning documents, and economic statistics published by the Central Bank.
The theoretical framework of the article is based on the ideas of Oliver Williamson and Douglass North. In Williamson’s view, institutions are classified into four levels of social analysis:
1. Informal institutions (religion, culture, traditions, norms), characterized as “embeddedness”
2. Formal rules of the game (constitutional, statutory, governmental, and judicial laws), referred to as the “institutional environment”
3. The actual process of playing the game and its implementation in contracts (transparency of the governance structure), referred to as “governance”
4. Prices and quantities (achievement of final equilibrium conditions), characterized as “resource allocation and employment”
In general, and from a more comprehensive perspective, New Institutional Economics operates across two levels: the rules governing performance, and the exercise of governance and management.

Discussion and Findings

The advancement and development of Kermanshah in contemporary history have evolved into a complex and unbalanced issue. The factors that have given rise to such conditions in this region cannot be attributed to a single cause, nor can they be explained through a linear or one-dimensional analysis. From a political perspective, the absence of a unified long-term provincial development strategy, along with the pursuit of multiple, discontinuous, and unstable strategies, has significantly contributed to the sluggish pace of development in the province. Among the components that have prevented consensus on a single development strategy for the province, the following can be highlighted:
Conflicts in development thinking and in defining progress, along with the tension between form and substance in the concept of development and the prioritization of political considerations over policy substance, constitute key issues that have rendered the process of adopting a unified development strategy by regional decision-makers ambiguous and conflict-ridden, thereby perpetuating this theoretical fragmentation
The second institutional factor with a key role in the formation of Kermanshah’s development dilemma is the tribal culture prevailing among both the population and the officials of the province.
The third institutional component with a prominent role in the formation of Kermanshah’s development underperformance is the weakness of development infrastructure, inadequate budget allocation, and the marginalization of Kermanshah’s development within broader national priorities.
Conclusion

In the current study, the institutional barriers underlying Kermanshah’s development dilemma – characterized by extensive and complex dimensions – were examined through three key institutional indicators, each representing a wide range of institutional obstacles. The identified components were analyzed within three categories: the weakness of strategic consensus in adopting a development approach; the formation of tribal tradition as a cultural legacy in Kermanshah Province; and the unfavorable condition of development policy implementation alongside the trajectory of modernization in Kermanshah over the past century (peripheral modernization). The outcomes of this process – which itself is the result of other subsidiary and foundational causes such as repeated wars, occupation and destruction of parts of Kermanshah, the lack of central policy focus on Kermanshah’s progress and development, and the weakening of the region’s economic priorities through policies misaligned with Kermanshah’s local conditions – have led to the backwardness and weakness of many indicators in Kermanshah Province when compared to other provinces of the country.

Abstract 1- Introduction:
The study examines the relationship between industrial diversity and manufacturing employment volatility in Iranian provinces. Regional employment volatility, characterized by significant fluctuations in employment levels, can lead to economic instability and high unemployment, as displaced workers struggle to find new jobs. Understanding the factors that influence employment volatility is crucial for policymakers seeking to promote regional economic stability.

2- Methodology
This paper investigates the effect of industrial diversity on manufacturing employment volatility in 27 Iranian provinces from 2001 to 2019. The authors utilize a panel data model and the System Generalized Method of Moments (GMM) estimation technique to account for the dynamic nature of employment volatility and address potential endogeneity issues.

3- Results
The findings suggest that increased industrial diversity has a negative and statistically significant effect on manufacturing employment volatility in Iranian provinces. This indicates that a more diversified industrial base can help stabilize regional employment levels and mitigate the adverse impacts of economic shocks. The results have important policy implications, as they suggest that promoting industrial diversification could be an effective strategy for reducing employment volatility and enhancing the resilience of local labor markets in Iran.
Additionally, the results show a U-shaped relationship between employment growth rates and employment volatility. The employment volatility in previous period, industrial structure change, and inflation volatility have a positive impact, while the size of factories and the ratio of employment in capital-intensive and knowledge-based industries have a negative impact on employment volatility.
4- Conclusion
The study contributes to the existing literature by providing empirical evidence on the role of industrial diversity in shaping regional employment volatility, with a focus on the understudied context of Iranian provinces. The findings offer valuable insights for policymakers and regional development planners seeking to foster more stable and resilient local economies.

Abstract Abstract
In recent decades, free trade zones have rapidly emerged in developing countries such as Iran. The primary objective behind establishing these zones has been economic progress at the regional or national levels, with less attention paid to the development of local communities. Existing experiences indicate the impact of these zones on urban growth and the interests of cities and villages within them in various economic, social, physical, and environmental dimensions. Indeed, the positive or negative transformations in these areas have a direct and indirect correlation with the success and achievement of the initial goals of these zones. Therefore, the identification and analysis of the types of causes and their effects are crucial.

This research aims to investigate and analyze the effects of the formation of the Maku Free Trade Zone on its local communities (including the cities of Maku, Bazargan, Poldasht, Shute, and Marganlar) using document analysis and surveys. The results indicate that, firstly, urban growth has been relatively limited, with the influential domain encompassing the development of urban infrastructure, transportation networks, and tourism-related land uses. Secondly, local communities in this area have, to a large extent, had relatively minimal shares in terms of equal opportunities, participation, a sense of ownership and belonging, trust, satisfaction with housing, and the urban environment.

Keywords: Free Trade Zones, Urban Growth, Local Community, Maku Free Trade Zone

Abstract Extended abstract 1-INTRODUCTION Economic theories and experiences of different countries show that there are different paths for economic growth and development, and the rate of growth and development depends on what sectors of the economy to invest in. the growth rate also varies according to the sectors in which it is invested. for this reason, the production system is usually divided into two parts: production and consumer goods, and it is often said that the productive goods sector is the driving force of growth. therefore, in the long run, maximizing growth depends on allocating as much investment as possible to key sectors of the economy. 2-THEORETICAL FRAMEWORK In general, growth and development theories are classified into three main groups in order to identify the importance of economic sectors and how resources are allocated: balanced growth theory, unbalanced growth theory and growth pole theory. Rosenstein-Roden (1943), the founder of the theory of balanced growth, argues that one sector alone cannot provide economic development, but if several sectors start producing with increasing and related returns, so that each demand for the product provide another, economic development will be possible. due to the skepticism of the theory of balanced growth, the theory of unbalanced growth was proposed in the economic literature by Hirschman (1958).  according to this theory, investment should be made in sectors so that the benefits of this investment penetrate into other economic sectors and investment conditions are provided in these sectors. in this theory, Hirschman (1958) believes that in order to achieve development, we have to choose one or more projects from different investment plans, according to our possibilities. other categories of theories for providing a path to development are known as growth pole theories. other categories of theories for providing a path to development are known as growth pole theories, first proposed by Peru (1968) in the economic literature. Peru’s innovative concept is actually derived from Schumpeter’s idea that growth is a direct and indirect product of innovation. in Peru’s theory, simultaneous growth does not occur everywhere, but at points or poles of development that have high gravity. these points spread development through channels and affect the entire economy. 3- METHODOLOGY The aim of this study is to identify the key core of the infrastructure sector of East Azerbaijan province with the multi-sector analysis (MSA) approach. In the first step, this research extracts information and communication technology as the key subdivision of the infrastructure sector of the province using MSA analytical model and Excel software and extracts the most important criteria in this sector. In the next step of this study, the SWOT method examined the strengths and weaknesses, opportunities and threats of the key core extracted from the MSA analysis, and using the Quantitative Strategic Planning Matrix (QSPM) method, the proposed strategies were prioritized. 4- RESULTS & DISCUSSION The results indicate that at the level of subsectors, ICT as a key core with 0.72 points and at the level of criteria, creating high added value, improving production capacity (process, equipment and technology) and absorption. Foreign capital is the most important, respectively. On the other hand, information and communication technology is also known as the most influential and influential sub-sector. Research findings show that information and communication technology has not found its proper place in East Azerbaijan province. 5- CONCLUSIONS & SUGGESTIONS Findings show that information and communication technology in East Azerbaijan province has not found its proper place and if the province wants to progress in this area, the strategies of the Defensive Group (WT), which is based on reducing weaknesses and avoiding threats, should be given priority. According to the results, the strategy of providing a suitable platform for e-businesses and creating a provincial unit for empowering Internet businesses to increase information security and empower ICT professionals and business idea owners in East Azerbaijan Province is recommended.