Document Type : Research Paper
Authors
1 Professor of Economics, Department of Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran.
2 Associate Professor, Department of Economics, Semnan University, Semnan, Iran
3 PhD student of Semnan
Abstract
Among the financial tools that governments have available for financing, we can mention the public debt of government expenses and taxes. On the other hand, a government seeking re-election tries to avoid social unrest. The question answered in this research is what is the government's policy in the face of social unrest? Therefore, in this research, the effect of economic inequality on public debt, government expenses and tax revenues has been investigated. In this research, the panel data model has been used using provincial data in the period 2011-2020. To estimate the regression model of this study, the feasible generalized least squares (FGLS) and generalized moments (GMM) method was used. The results of this research show that with the increase in urban economic inequality in Iran's provinces, the government's policy in the face of unrest is to increase the budget deficit as a proxy of public debt. The policy adopted in the face of unrest caused by rural economic inequality is to increase public spending and debt. The increase in urban economic inequality in interaction with the ratio of executive period has a positive and significant effect on public debt and government expenses and significantly reduces tax revenues. The increase of rural economic inequality in interaction with the ratio of executive period has a negative and significant effect on government debt and expenses and increases tax revenues significantly.
Keywords
Main Subjects
)