Document Type : Research Article

Authors

• Seyed Mohammad Moghimi ¹
• Saied Samiie ²
• Mohammad Hosein Bojari Sefat ³

¹ Department of Public Policy, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran

² Assistant Prof., Department of Futures Studies, Faculty of Governance, University of Tehran, Tehran, Iran

³ MSc. Public Finance and Budgeting, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran

Abstract

Purpose: The primary objective of this study is to systematically identify and analyze the factors contributing to the budget deficit in Iran from a holistic perspective. By focusing on the institutional, structural, economic, and political roots of the budget deficit, the study aims to provide a comprehensive framework for sustainable reform of the budgeting system and for enhancing fiscal governance in the country. As one of the chronic challenges facing Iran’s economy, the budget deficit not only affects fiscal variables such as public debt and interest rates but also has far-reaching consequences for macroeconomic stability, investment, and public trust. This study seeks to provide in-depth insights into the underlying causes of the deficit and to offer practical solutions to reduce it and improve the government's fiscal sustainability—thus serving as a useful tool for policy-level decision-making.
Design/methodology/approach: This study uses a qualitative approach within the interpretive paradigm. Data were analyzed using thematic analysis based on Braun and Clarke’s six-phase model, which allows for the identification and interpretation of both explicit and implicit meaning patterns. Data were collected from two primary sources: semi-structured interviews with 12 experts in budgeting and public finance, selected through purposive sampling and snowball techniques; and secondary sources, including official documents, reports, expert panels, and institutional analyses. Entry criteria for the study included a minimum of 15 years of professional experience and at least 5 years of direct involvement in budget processes. Reliability was ensured through intercoder agreement (Cohen’s kappa coefficient = 0.78), and validity was established through expert review (including university professors and senior managers), alignment with theoretical foundations, and methodological triangulation. This approach ensured a systematic analysis of the data and enabled the identification of recurring patterns and deep insights.
Research Findings: The data analysis yielded 239 initial codes, 156 focused codes, 51 sub-themes, and 15 main themes, reflecting the complexity and interconnectivity of the factors contributing to Iran’s budget deficit. The findings indicate the presence of a chronic and expanding structural deficit that accounts for nearly half of public revenues. This deficit stems from reliance on unsustainable sources such as oil revenues, debt issuance, and asset sales; a weak tax system; fiscal indiscipline; inefficiencies in public asset management; and the misuse of intergenerational resources, such as the National Development Fund. The absence of a public debt management law, failure to control liquidity, lack of financial transparency, and inability to attract private-sector participation also emerged as key drivers of the problem. Financing mechanisms such as oil pre-sale bonds, helicopter money, and extensive issuance of government bonds have not only deepened the deficit but have also led to macroeconomic instability, rising inflation, declining investment, and eroded public trust. These factors operate within a vicious cycle that threatens the government's fiscal sustainability.
Limitations & Consequences: The primary limitation of this study lies in its qualitative nature and reliance on the perspectives of selected experts, which may limit the generalizability of the findings. In addition, limited access to confidential financial data and internal documents from executive agencies constrained the depth of analysis in certain areas. These limitations may have affected the comprehensiveness of the results and made it more difficult to conduct detailed assessments of some aspects of the budget deficit. Nevertheless, the triangulation of data and the use of diverse sources served as efforts to mitigate these limitations.
Practical Consequences: The findings suggest that addressing the chronic budget deficit requires implementing a coordinated, comprehensive reform package. This package should include structural reform of the tax system to increase sustainable revenues, the drafting of an extensive public debt management law, enhancement of financial transparency and accountability, redefining the role of the National Development Fund as an intergenerational investment institution, improving budgetary spending efficiency, redesigning the public-private partnership framework, and commitment to long-term fiscal discipline. These reforms could reduce reliance on unsustainable resources, enhance macroeconomic stability, and help rebuild public trust.
Innovation or value of the Article: The innovation of this study lies in its multi-layered and systematic analysis of the factors behind Iran's budget deficit. Moving beyond sectoral assessments, it explores the causal linkages between institutional, political, managerial, and structural dimensions. By combining thematic analysis with local data, the study offers a conceptual framework for fiscal governance reform that can serve as a foundation for high-level policymaking. The study’s holistic perspective sets it apart from prior research and provides practical insights for policymakers.
Paper Type: Original Paper
 

Keywords

• Budget Deficit
• Thematic Analysis
• Fiscal Governance
• Resource Mobilization
• Iran's Budgeting System