In recent decades, along with changes in development pace of countries, scholars in economic, social, geographical, planning, etc. fields have dedicated growing attentions to national-regional development. The process of globalization, unbalanced distribution of income and economic opportunities, the type of national and regional micro and macro policies, and distinct approaches to decentralization or decentralization are some drivers of this research proliferation (Sabic &Vujadinovic, 2017). In the process of national-regional development, it is important to recognize the level of regional development and differences. It is because in the regional development of each country, this process runs the risk of slowing down the entire economy. Therefore, identifying and measuring inequalities is of great importance in terms of formulating effective economic policies.
Moreover, the realization of this goal in the process of national development and planning is a function of recognizing the level of development in regions and their differences. The body of research in Iran shows that different regions and provinces, influenced by historical, cultural, geographical, national-regional policies, and micro and macro factors, have taken different paths (Zarabi & Izadi, 2013). Land reform in the 1960s, the industrialization strategy in the Fourth Development Plan (1971-1967), the establishment of industrial hubs in the vicinity of major cities, the 1979 Revolution, the Iran-Iraq war, etc. have triggered structural and functional changes in different regions and cities of Iran. The outcomes of these changes expose differences in economic development of provinces over the last years (Ziari et al., 2011). In Tehran (the capital) as a center for the concentration of population, capital and economic activities, centralism has been intensified over several decades. At the same time, Sistan and Baluchestan have been largely deprived of growth and development manifestations and the process of development has faced a plethora of obstacles such as absence of large industries, rural-urban migration, ethnic-religious issues, water shortage, etc. Therefore, inappropriate centralization strategy (population, activity and capital) in the provinces of Iran has intensified economic development in the regions and triggered discrepancies in development or backwardness.
After the 1979 Revolution, the government attempted to formulate policies in form of regional planning, with the goal of decentralizing metropolises (as the center of population and economic activities) and alleviating regional differences. It seeks to diminish, as pointed by Schumacher, the duality of economic growth and development in developing countries such as Iran. (Nasrollahi et al., 2011). This paper provides a concrete experience of regional development differences in a developing country. On the one hand, the new (Islamic) government has tampered with centralization and decentralization strategies in regional development in a trial and error fashion since 1980, and this experimentalism has intensified regional development discrepancies. On the other hand, international sanctions and rising economic inflation have slowed down the growth of the national economy. This has also contributed to stabilizing or aggravating regional development issues. This article aims to shed light on differences and the status of regional development in these two provinces through the comparison of official data derived from 2011 and 2016 national censuses.
To achieve this goal, we seek to answer the following two questions.
1.Do differences in the HDI of the two provinces under study prioritize the need for bottom-up planning and the implementation of effective strategies?
- What are the effects of centralism or decentralization approach on regional development disparities between Tehran and Sistan and Baluchestan provinces?
Research background
On an international scale, many studies have explored the relationship of investment and economic centralization with regional development or vice versa. Zhang (2007) argues that economic centralization, coupled with political centralization and support, aggravates regional inequality and differences (Zhang, 2007). Yu et al. (2011) also point to the positive relationship between foreign investment in one region and the intensification of discrepancies in other regions (Yu, et al, 2011). The results of Florida’s (2011) study revealed that three factors of technology, potential and tolerance are involved in the development of each region. That is, in the presence of these three factors, a region can lay the ground for attracting creative labor and promoting emergence of innovation and technology, which in turn contribute to regional balance (Florida, 2011). Ali and Mingque (2018) reported that foreign and domestic investment in the long run has a significant and positive impact on the growth of developing Asian countries such as Pakistan, Thailand, and can mitigate regional development disparities (Ali & Mingque, 2018). The findings of Feriyanto et al. (2019) revealed that the production rate of economic sectors and the real growth of GDP spikes as a result of domestic and foreign investment (Feriyanto et al, 2019). Extensive studies have investigated this subject on national and regional scales. Al-Emran and Al-Emran (2012) sought to measure the impact of human capital promotion on the economic growth of OPEC countries, concluding that the human factor (intellect and creativity) has a greater effect on rapid economic growth than physical infrastructure (Al-Emran & Al-Emran, 2012). Mahidol et al. (2016) studied the causal relationship between HDI and economic growth in Iran using a nonlinear model approach. They reporteda positive relationship between rising oil revenues, economic growth and improvement of human development index in different regions of Iran (Mahdilo et al., 2016). Sadeghi Shahedani and Khosravi (2016) also asserted that preparation and implementation of Iran's 5-year Development Plans in post-1979 Revolution era has affected Iran's national and regional economy in terms of income distribution and growth (Sadeghi Shahedani & Khosravi, 2016). Eta’at and Dabiri (2016) studied the effects of centralism and immigration in Tehran. Their results underscored the approach to the strategy of centralism in Iran, suggesting that economic, demographic, cultural, political concentration in Tehran has given rise to industrial and demographic poles. According to their comparative study, the process of regional growth and development has mounted environmental threats and provoked regional inequality (Eta’ati, 2016). Feizabadi and Zahedi (2018) in another study on the analysis of socio-economic inequalities of development in rural areas of Iran argued that HDI places humans at the center of development models. By examining the development process between Tehran and Sistan and Baluchestan, they concluded that Tehran and Sistan and Baluchestan, as a migrant receiving and migrant sending communities, respectively, have influenced human development differences and subsequent regional development in these areas (Feizabadi & Zahedi, 2018).
Theoretical Foundations
Endogenous growth theory
In the early 1990s, the ideas of Paul Romer and Robert Lucas introduced new concepts to the field of regional growth and development. They developed the concept of endogenous growth inspired by technology and innovation. The endogenous grow this a process that promotes human capital through skills, creativity and innovation, leading to the improved efficiency of labor and human development in a region. The main idea of this theory was put forth by Schumpeter (Mohammad zadeh et al., 2017). Therefore, in the literature on endogenous growth, human development is the key to economic growth and development and thus a top priority of governments (Bergman & Feser, 2017). Human development puts humans at the heart of development models (Feyzabadi & Zahedi, 2018). The HDI report released by the UNDP is a valid database with extensive applications in scientific analyses. According to this index, the development of different countries is measured based on data obtained from diverse aspects including life expectancy, general education and household income (Bakhshudeh, 2006). In this research, the UN database has been employed for the analysis of the HDI, as shown Table 1. Also, in Table 2, countries are classified in terms of human development index that Iran is in the top category of human development (Table 2).
Table 1: Iran's ranking in human development indicators
Classification of countries in HDI index
|
Amounts
|
Very high
|
1 – 0.800
|
High
|
0.800 – 0.700
|
Medium
|
0.700 – 0.550
|
Low
|
0.550– 0
|
Source: UN,2020
Table 2: Classification of countries based on HDI
Gross national income (GNI) per capita (PPP $) SDG 8.5
|
Mean years of schooling (years) SDG 4.6
|
Expected years of schooling (years) SDG 4.3
|
Life expectancy at birth (years) SDG3
|
HDI (value)
|
Country
|
Rank
|
76.0
|
13.5
|
10.2
|
27,227
|
0.804
|
Malaysia
|
61
|
73.3
|
15.5
|
9.7
|
25,077
|
0.801
|
Seychelles
|
62
|
75.8
|
14.8
|
11.2
|
15,218
|
0.799
|
Serbia
|
63
|
73.4
|
13.0
|
11.0
|
28,497
|
0.799
|
Trinidad and Tobago
|
63
|
76.5
|
14.7
|
10.0
|
18,166
|
0.797
|
Iran (Islamic Republic of)
|
65
|
74.9
|
15.0
|
9.4
|
22,724
|
0.796
|
Mauritius
|
66
|
Source: UN,2020
In the new theories, human capital is a perquisite for economic and regional growth and development (Zubair & Motameni, 2020). Human capital originates from education, skills and creativity. Education and skills are key factors for economic growth that have a bearing on endogenous lifestyle and development (Hafner & Mayer, 2013). It is also driven by the impact of education on improving the techniques and development of new ideas. (Hassan & Rafez, 2017) Therefore, it can be argued that endogenous growth is an endogenous factor that feeds on social and human capital, leaving a direct effect on national-regional growth and development.
Growth and imbalance theory
As regards national-regional growth and development, diverse theories and strategies have been presented by economist and development literature. Each of these theories has adopted a distinct approach to this subject. The advocates of the classical theory contend that population concentration and its geographical distribution are main drivers of regional growth and development (Petrakos & Saratis, 2000) However, neoclassical economists investigate the contribution of technology and capital to the economic growth of an important region (Rahmani & Bagherpour, 2017). Still, the advocates of new theories in economic development like François Peru present the growth pole model as an effective strategy in regional development while others regard it as a vehicle for socio-economic change and alleviation of regional disparities (Bergman & Feser, 2017). John Friedman also posits that the growth pole strategy is effective in regional development and mitigating inequalities. (Friedman, 2017) Michael Porter also maintains that competitiveness and competitive strategy in regional economy are associated with social progress and sustainable growth (Snowdon & Stonehouse, 2006). Among the theories closely associated with the subject of this research, Gunnar Myrdal’s theory of growth and imbalance takes precedence. He argues that the growth and development in a region can lead to the stagnation in other regions. This is particularly true in backward and developing countries. According to Myrdal, inequality and regional differences in these countries are on rise in the absence of economic integration, growth stimuli and deterrents of recession. Thus, economic integration is significantly linked to regional development, which contributes to national convergence (Antonescu, 2014). The theory of economic underdevelopment reflects another aspect of Myrdal's ideas that underline the impact of external factors such as investing on regional differences. This implies that developed regions are more successful in the race for investment attraction, which in turn intensifies regional differences (Aritenang, 2018). He also highlights the role of governments in stimulating growth factors such as capital, labor, etc. Myrdal’s theories of growth and underdevelopment are directly linked to the subject of this article and can be considered as the basis of analysis.