Increasing the Efficiency of Transfer Payments in Iran Using System Dynamics

Iran’s economy is remarkably influenced by its oil industry and hence, the level of social welfare strongly depends on its oil market. Because of the prevailing and global increase of oil price, it seems conceivable to improve the social welfare through some efficient policies. In this research first the current situation of Iran’s national economy and social welfare is analyzed in order to discover the current policies’ malfunctions and their origin. The dominant scheme here is to use holistic insight in applying sustainable development approach as well as trying to stabilize the fluctuations in welfare and economic levels of the society. In this study three policies are used in order to cope up with imposed fluctuations of oil price. These policies include reducing oil subsidies, investing on health, education and manufacturing-construction areas, and a gradual increase in taxes. Finally, an effort is made to develop Iran’s economy by increasing the role of non-oil industries.