THE ROLE AND IMPACT OF EDUCATION ON THE ECONOMIC AND POLITICAL DEVELOPMENT OF IRAN

The belief in education\u27s vitality in the economic development of Iran set the present study\u27s objectives: an analysis of the role and impact of education on the political-economic development of Iran; the identification of Iran\u27s educational problems; the measurement of education\u27s impact on the Iranian economy; and the propositions on policy reforms to facilitate development of the country. An overview of Iran\u27s economy reveals that sectoral and regional integrations were weak. Iran\u27s agriculture had been backsliding. The land reform failed due to inappropriate institutions and, thus, agricultural problems were aggravated. The absence of sectoral integration and dependence of industry on the oil sector and imported inputs and technology inhibited sustained economic growth in Iran. Economic development in Iran requires parallel development of physical and human capital. Despite considerable industrialization, Iran lacked a harmonious expansion of educational and other infrastructure facilities. Shortage of high-level manpower created bottlenecks to organic development of the Iranian economy. Shortage of human resources and inadequacy of infrastructure resulted from the educational and institutional problems, which were rooted in inefficient socio-economic organs governing the economy. Education raises economic efficiency by improving the quality of economic agents, transmits socially accepted values, improves and regenerates existing institutions, modifies outdated institutions, and creates new ones to induce economic growth. Education is an agent to increase human satisfactions and critical thinking, and to reduce income inequality. The positive relationship between the rates of return and the levels of education signifies the instrumentality of education in economic and political development of Iran. The dynamic analysis of the inherently stable aggregate econometric model, containing equations for private consumption and government expenditures, investment outlays, imports of goods and services, and income identities, indicated that the impacts of education on the Iranian economy were moderate during the first ten years of the sampling period (1960-1977). These impacts became larger during the remaining years due to impressive expansion of educational facilities which were made possible by sharp rise of oil revenues