[A-List] Revolution and Redistribution in Iran: Poverty and Inequality 25 Years Later

["Yoshie Furuhashi" <critical.montages@xxxxxxxxx>]

<http://www.filebox.vt.edu/users/salehi/Iran_poverty_trend.pdf>
Revolution and Redistribution in Iran: Poverty and Inequality 25 Years Later
Djavad Salehi-Isfahani
Department of Economics
Virginia Tech
Version August 2006

Abstract

Despite nearly three decades of revolutionary government rule in Iran
poverty and inequality remain the central issues of political debate
in Iran. Economic dissatisfaction, which led to electoral upset by a
populist candidate in the 2005 presidential election, has been widely
attributed to rising poverty and inequity. Using household survey data
I describe the trends in poverty and inequality for the last three
decades and show that this thesis is not grounded in facts. The
evidence shows that poverty, having substantially declined in recent
years, is quite low by international standards and in comparison to
pre-revolution years. Inequality improved significantly immediately
after the Revolution but has remained relatively stable during the
last 15 years. Significantly, poverty sharply declined and inequality
decreased somewhat in the five years leading up to the election.
Increased welfare of the poor over the period is also evident in
access to basic services, such as electricity and safe water, as well
as in ownership of household appliances. The wide gap between the
evidence presented here, which shows improvement in the welfare of the
poor, and popular sentiments in Iran, which indicate worsening poverty
and inequality, raises important questions about the political economy
of redistribution in Iran. I suggest that in the context of a
distributive economy such as Iran's, in which wealth accumulation is
seen to depend more on political access than individual productivity,
more subjective feelings of envy and fairness may matter more than
objective indicators of poverty and inequality.

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Yoshie
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