Pparisa Moghadasi; Sajjad Faraji Dizaji; Abbas Assari Arani
Abstract
Income inequality is a critical economic issue that can destabilize socio-economic systems by impacting public health and economic resilience. This study investigates the role of good governance in mitigating the effects of COVID-19 on income inequality in oil-exporting countries, employing a panel ...
Read More
Income inequality is a critical economic issue that can destabilize socio-economic systems by impacting public health and economic resilience. This study investigates the role of good governance in mitigating the effects of COVID-19 on income inequality in oil-exporting countries, employing a panel data model from 2000 to 2021. The analysis includes countries exporting over 50,000 barrels of oil daily, categorized into three groups by oil rent share in GDP. The independent variables encompass oil and gas rent, stringency index, population density, unemployment rate, good governance, an interaction term of good governance and COVID-19, and COVID-19 death rate. Findings indicate that the good governance-COVID-19 interaction significantly reduces income inequality in the first and third groups, with a negative effect on the Gini coefficient. However, in the second group—characterized by the highest oil rent—good governance does not mitigate the inequality impact of COVID-19-related deaths.
Introduction
The onset of 2020 marked the beginning of a global health crisis, with the COVID-19 pandemic significantly impacting economic sectors such as tourism, trade, capital markets, and currency stability. To contain the virus, governments increased health expenditures and offered financial support to households and businesses, funded through budget reallocations or tax adjustments. The pandemic’s effects varied among countries, influenced by differences in economic, political, cultural, and social structures, as well as governance responses (Nasseri et al., 2016).
In oil-dependent economies, natural resource rents—derived from foreign exchange earnings and foreign aid—exert a profound influence on institutional quality and governance. High oil rents contribute to a government’s financial independence from internal economic performance, potentially undermining good governance. Given the crucial role of governance, assessing public trust and the effectiveness of governance during the COVID-19 pandemic is essential, particularly regarding income inequality in oil-exporting countries (Dizaji, 2014; Dizaji & Ghadamgahi, 2018).
This research investigates the interactive effect of good governance and COVID-19 on income inequality in oil-exporting nations. In these countries, where budgets heavily depend on oil revenues, tax collection efforts may be deprioritized, reducing the efficiency of tax systems (Dizaji et al., 2023).
Methods and Material
This study uses an analytical-descriptive approach, employing a generalized linear model (GLM) for panel data to analyze the interactive effect of COVID-19 and governance on income inequality. Data were sourced from the World Bank, WHO, SWIID, Our World in Data, and OPEC. The study categorizes oil-dependent countries into three groups based on oil rent as a share of GDP:
First group: Countries with oil rent below 0.1% of GDP, including Australia, Sweden, the Netherlands, and others.
Second group: Countries with oil rent exceeding 10% of GDP, including Angola, Russia, Iran, and others.
Third group: Countries with oil rent between 0.1% and 10% of GDP, including Mexico, Brazil, China, and others.
Results and Discussion
The model presented in this paper is based on Mousavi Jahromi et al. (2013) and Su et al. (2022). We use oil rent, good governance, death rate resulting from COVID-19, stringency_index, unemployment rate, and population density as control variables in our model. In order to investigate whether good governance has been effective in reducing the adverse effects of COVID-19 on income inequality or not, the interactive variable of the product of the death rate from COVID-19 and good governance has been used.
GINI=
As can be seen, the coefficient of good governance is negative for all three groups of countries. This means increased good governance, can decrease income inequality, which is consistent with the results of past researches.
Table 1 GLM model estimation results
First Group
The explanatory variables
Coefficient
z statistic
Possibility
POPULATION_DENSITY
0/001351
11/56046
0/0000
GG
-4/302316
-8/865396
0/0000
STRINGENCY_INDEX
0/228148
1/772713
0/0763
UNEMPLOYMENT
-0/242954
-2/100441
0/0357
GG*COVIDDEATH
-0/000304
-0/398861
0/6900
COVIDDEATH
-12/02037
-1/675971
0/0937
Second Group
The explanatory variables
Coefficient
z statistic
Possibility
POPULATION_DENSITY
0/050317
5/607696
0/0000
GG
-0/000109
-0/784517
0/4327
STRINGENCY_INDEX
-0/018377
-0/089050
0/9290
RENT
0/388662
7/323428
0/0000
UNEMPLOYMENT
-0/241551
-1/330671
0/1833
GG*COVIDDEATH
0/001313
0/457576
0/6473
COVIDDEATH
2/248878
0/190813
0/8487
Third Group
The explanatory variables
Coefficient
z statistic
Possibility
POPULATION_DENSITY
-0/004998
-2/011478
0/0443
GG
-5/515814
-11/25881
0/0000
STRINGENCY_INDEX
-0/041721
-0/289228
0/7724
RENT
-0/462772
-3/916503
0/0001
UNEMPLOYMENT
0/662014
8/476852
0/0000
GG*COVIDDEATH
-0/001835
-0/881103
0/3783
COVIDDEATH
1/006094
0/111800
0/9110
* Research findings using Eviews software
The coefficient of the stringency index for countries of the second and third groups is negative, which means that increased stringency can decrease income inequality. But in the countries of the first group, the coefficient of stringency is positive, which means increased stringency can increase income inequality.
The interactive variable Corona × good governance has a negative and insignificant effect on income inequality in the first and third group countries and a positive and insignificant effect on the second group countries.
Conclusion
The results indicate that good governance in oil-exporting countries has effectively mitigated the adverse effects of the COVID-19 pandemic on income inequality. High-quality governance fosters public trust, enabling governments to respond more effectively to crises. Thus, nations with stronger governance frameworks have shown greater success in addressing COVID-19’s challenges and minimizing its negative impact on income disparities. This emphasizes the critical role of governance quality in managing socio-economic crises and maintaining equality.
Abbas Assari Arani; Saeid Rostami
Abstract
This study examines the impact of energy security on the economic growth of the 10 selected energy exporting countries in the Middle East. The Benchmark model is based on a generalized version of Cobb Douglass’s production function. Ten measures of energy security have been used for ...
Read More
This study examines the impact of energy security on the economic growth of the 10 selected energy exporting countries in the Middle East. The Benchmark model is based on a generalized version of Cobb Douglass’s production function. Ten measures of energy security have been used for the whole set of panels, using five concepts of energy security including, availability, accessibility, acceptability, cost- effectiveness and development capability. The paper uses estimated generalized least squares (EGLS), and panel– corrected standard error (PCSE) to estimate the model. Based on the results, the lack of difference between "energy production" and "energy consumption", has a positive effect on the economic growth of selected Middle Eastern energy exporting countries . Also, "national energy supply ability", "national energy structure", "renewable energy consumption", "carbon dioxide emissions from fossil energy consumption", "political stability" and "oil price" also have a positive effect on the economic growth of these countries. But the amount of "energy intensity" and "the ratio of carbon dioxide emissions to GDP" had a negative impact on their economic growth.
Nima Mohamadnejad; Abbas Assari Arani; Gholamreza Keshavarz Haddad; Sajjad Faraji Dizaji
Abstract
Increasing income levels in recent decades have led to an increase in the health share of GDP, which in turn has led to enhanced health and reduced mortality rates. The monetary value of mortality rate reduction leads to the concept of Value of a Statistical Life that this study calculates and examines ...
Read More
Increasing income levels in recent decades have led to an increase in the health share of GDP, which in turn has led to enhanced health and reduced mortality rates. The monetary value of mortality rate reduction leads to the concept of Value of a Statistical Life that this study calculates and examines its dynamics for 19 age cohorts after eliminating the shortcomings of the Hall and Jones (2007) model and utilizing a dynamic planning approach (in a life cycle model). After calculating the statistical value of life, Grossman's (1972) health capital is established and calculated in Hall and Jones's (2007) theoretical framework. Results show that improving the health status of 10-14 year old individuals has the highest monetary value compared to other age groups. Also, the monetary value of utility resulting from improved health declines with age, so that for over 65 years old individuals, the monetary value of improved health reaches to the level of the monetary value of utility derived from consumption. Infant health capital fluctuates between 2 and 15 million dollars throughout 1996-2015. The fluctuation of health capital and the Value of a Statistical Life depend s on the fluctuation of per capita income, which confirms the very tight relationship between income, consumption, utility, and monetary value of life.
alaeddin ezoji; Abbas Assari Arani; mohmmad reza vaeze mahdavi; GholamReza K. Haddad
Abstract
The relationship between human capital and labor productivity is always important for economists. Considering the relationship between these two will also be remarkable in microeconomic studies. Meanwhile, the impact of different dimensions of human capital on labor productivity can be a measure ...
Read More
The relationship between human capital and labor productivity is always important for economists. Considering the relationship between these two will also be remarkable in microeconomic studies. Meanwhile, the impact of different dimensions of human capital on labor productivity can be a measure of actual effect of human capital on productivity. The aim of this paper is to examine the effects of various dimensions of human capital (education, health, and experience), on labor productivity based on individual characteristics in Iranian economy. We use micro data (Cost–Income Survey of Urban Areas - 2013) and estimation of Quantile Regression (QR) econometric technique. For this purpose, net income (wage and salary) for employment in private sector is used as proxy of labor productivity. Our results show that in different quantiles, all three dimensions of human capital have a positive and significant effect on productivity of labor force employed in Iranian private sector. Meanwhile, in different quantiles, health indicators of human capital are more volatile than other dimensions of human capital, i.e. education and experience. So, in lower quantiles (Ql), the response of labor productivity to health indicators is more than higher quantiles (Qh). Because of that, any kind of health shock may have a greater effect on labor productivity in lower-income groups. This result shows the importance of health capital in social security, insurance and health systems and reminds us to improve the productivity of working people by means of better health capital.
Khaled Ahmadzadeh; Kazem Yavari; Abbas Assari Arani; Bahram Sahabi
Volume 12, Issue 47 , January 2013, , Pages 1-20
Abstract
In recent decades and especially in developing countries, the trade of services has faced an increasing trend. The export of services can improve trade balance, economic growth, employment as well as development of merchandise sector. This paper uses a descriptive and analytical approach and intends ...
Read More
In recent decades and especially in developing countries, the trade of services has faced an increasing trend. The export of services can improve trade balance, economic growth, employment as well as development of merchandise sector. This paper uses a descriptive and analytical approach and intends to evaluate performance and factors affecting the total export of services and particularly the export of technical and engineering services in OIC selected countries by applying panel data method.
The results of estimating the performance indicators and comparative advantage of technical and engineering services export indicate that between years 1994 to 2010, Iran's position among these countries has improved. In our analysis, factors such as GDP per capita, real effective exchange rates, inflow of foreign investments, communication infrastructures and also being member of two trade blocs -ECO and D8- have significant and positive effect on the total export of services and also the export of engineering services. Thus, it is necessity for governmental institutions and private sector in Iran to plan and prepare to further develop the export of services.
Abbas Assari Arani; Lotfali Agheli; Saeid Shafiei; Meysam Rasoli Mir
Volume 11, Issue 40 , April 2011, , Pages 31-48
Abstract
Abstract Fair distribution of income has been considered as the most important economic issues in different countries. In recent years, the quality of income distribution and the impact of macroeconomic policies on that has been more considered, ...
Read More
Abstract Fair distribution of income has been considered as the most important economic issues in different countries. In recent years, the quality of income distribution and the impact of macroeconomic policies on that has been more considered, especially after the issue of poverty reduction projects in the world. In today's world, the biggest factor causing poverty is not the lack of income, but it is the unfair distribution. Currently, majority of economists, considered the income distribution as one of the goals of government economic programs and the impact of fiscal policy on that as very important. This paper seeking for examination of the effect of fiscal policies on income distribution in IRAN. For this purpose we use a quantile regression model. In summary, the results show that the government's fiscal policies that impact on the Gini coefficient is not constant, but between different quantiles is different. While these policies in low quantiles do not have significant effects on income distribution, but their effects on the high quantile income distribution is quite significant.
Hosein Sadeghi soghdel; Abbas Assari Arani; Vahid Shaghaghi Shahri
Volume 10, Issue 39 , January 2011, , Pages 139-174
