Classifying regional development in Iran (Application of Composite Index Approach)

Extended abstract1- IntroductionThe spatial economy of Iran, like that of so many other developing countries, is characterized by an uneven spatial pattern of economic activities. The problem of spatial inequality emerged when efficiency-oriented sectoral policies came into conflict with the spatial dimension of development (Atash, 1988). Due to this conflict, extreme imbalanced development in Iran was created. Moreover spatial uneven distribution of economic activities in Iran is unknown and incomplete. So, there is an urgent need for more efficient and effective design, targeting and implementing interventions to manage spatial imbalances in development. Hence, the identification of development patterns at spatial scale and the factors generating them can help improve planning if development programs are focused on removing the constraints adversely affecting development in potentially good areas. There is a need for research that would describe and explain the problem of spatial development patterns as well as proposal of possible strategies, which can be used to develop the country and reduce the spatial imbalances. The main objective of this research was to determine spatial economic development level in order to identify spatial pattern of development and explain determinants of such imbalance in Iran based on methodology of composite index of development. Then, Iran provinces were ranked and classified according to the calculated composite index. To collect the required data, census of 2006 and yearbook in various times were used. 2- Theoretical basesTheories of regional inequality as well as empirical evidence regarding actual trends at the national or international level have been discussed and debated in the economic literature for over three decades. Early debates concerning the impact of market mechanisms on regional inequality in the West (Myrdal, 1957) have become popular again in the 1990s. There is a conflict on probable outcomes between the neo-classicalists and structuralists. The neo-classicalists, optimistic about market forces, regarded regional inequality as a passing phase and postulated that market forces would ensure that the returns to all factors of production would approach their marginal products. Regional inequality initially arises in the process of the allocation of resources, but factor mobility and efficient market forces would eventually ensure regional equality (Smith, 1975); although a prerequisite of efficient markets is the existence of fully competitive markets, which are not present in most developing countries. S