Examining the ineffectiveness of the government's approach in policymaking in the field of foreign investment in Iran Analysis in the framework of Markovian equilibria

Document Type : Original Article

Author

Isfahan university

Abstract

In economic literature, capital accumulation and foreign investment are always considered as essential factors in creating economic growth and development. The most important advancement of this study is to provide a framework for understanding the causes of ineffectiveness of the government's approach in facing the issue of foreign investment in Iran. In fact, understanding how the actors involved in the investment issue are motivated and how they interact in order to form cooperative behaviors can help to understand the reasons for the ineffectiveness of the government's approach in the field of foreign investment. For this purpose, in the present study, the interaction of the players involved in the foreign investment issue has been analyzed in the framework of Markovian equilibria. The results of the present study show that the socio-economic position of the people and the degree of credibility of the government's policies have an effect on how they interact with other actors (investors and the government). So, the higher the people's understanding of existing inequality (class gap) or the lower the credibility of the government's promises, the higher the probability of non-cooperative behavior from the people.

Therefore, it is suggested that the government should pay special attention to the interests of actors in the field of action and how to motivate them in order to form cooperative behaviors when formulating policy programs. Also, considering that the interaction of the players involved in the issue of foreign investment has an impact on policy outcomes, therefore, when making policies, it is better for the government to avoid applying a top-down approach, which mostly ignores the interests of the players.

The findings of this study can help to improve the government's approach to the issue of foreign investment and in this way, provide the grounds for attracting and promoting more investment.

Keywords

Main Subjects

References

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Public Sector Economics Studies
Volume 3, Issue 3 - Serial Number 9
October 2024
Pages 441-474

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History

  • Receive Date: 09 March 2024
  • Revise Date: 17 June 2024
  • Accept Date: 20 June 2024

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