Iran: A Bumpy Road toward Basic Income

Chapter · January 2012with 249 Reads 
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DOI: 10.1057/9781137045300_16 ·
In book: Basic Income Guarantee and Politics, pp.285-300
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Iran’s experience with basic income is paradoxical. The concept is virtually unknown in the country and almost entirely absent from the public discourse. And yet, since December 2010, all Iranians residing in the country have been entitled to, and nearly all receive, a monthly cash transfer of Rl 455,000 (about $45)1 per person from the government. These unconditional transfers are officially known as “cash subsidies,” since they replace price subsidies that are being phased out. The scheme falls short of a basic income as commonly conceived in the literature, but it comes far closer to it than any other large-scale cash transfer scheme in the world. It is in effect a de facto basic income that is unique not only in its scope and size, but also in its provenance and prospects. Indeed, as a potential model for replication, it may claim certain advantages over some alternative pathways to a basic income, not least the fact that it is already in place as it approaches its first anniversary.

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  • ... Iran, a major oil producer and exporter, for many years used the proceeds to implicitly subsidise the domestic consumption of private individuals and enterprises by keeping oil prices at one of the lowest levels in the region. 10 This extraordinary situation is untenable in the long run and, in a move towards rationalisation, in December 2010 Iran initiated the first stage of a five-year reform programme (Tabatabai, 2011(Tabatabai, , 2012a(Tabatabai, , 2012b. ...
    ... 12 The immediate challenge, however, appears to be the intense financial pressure on the system: in part because of miscalculating the expected revenue and in part because of increased demand after eligibility criteria were relaxed; 80 per cent of the revenue from higher fuel prices goes towards funding private household transfers (instead of the originally budgeted 50 per cent). With the budget fixed by law, the future stability of the programme requires a significant adjustment by either reducing the transfer amount for all or else giving up on the principle of near-universality and reintroducing the notion of eligibility criteria (Tabatabai, 2012a(Tabatabai, , 2012b. Neither solution is very appealing from the perspective of a basic income guarantee. ...
    ... There is little dispute that the schemes currently implemented in Alaska and Iran leave something to be desired from the perspective of a full-blown basic income guarantee, whether it be the low level and variation of the grant, payment on a yearly basis rather than monthly, payment through households rather than individuals, or indeed uncertainty of the stability of the programme over time. Addressing these shortcomings within the particular policy context in which these schemes emerged may be problematic, for reasons mentioned (Zelleke, 2012;Tabatabai, 2012aTabatabai, , 2012b. ...
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    Following the success of a recent Swiss Citizens’ Initiative to grant each citizen an unconditional income guarantee and the Finnish Government's plans to conduct the first national pilot project, the idea of a basic income as a citizens’ right has gained much prominence in the policy debate. This article reviews a number of policy developments on the ground through the lens of the policy transfer literature. In the absence of a fully developed basic income in place, proponents must rely on partially implemented schemes or proposals that differ in crucial respects from the basic income ideal. This paper outlines three sets of empirical cases and analyses what (if any) lessons we can draw from them regarding the future of basic income schemes.
  • ... The government of Iran introduced in 2011 a universal basic income for all citizens of the country. Its application was the result of the ongoing reform of the subsidy system [19], which was aimed primarily at eliminating non-market pricing principles and improving the efficiency of the economy, as well as a more equitable redistribution of oil rent [20]. ...
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    The article presents the results of the analysis of the practice of implementation the concept of universal basic income. It is shown that in estimating the results of a series of experiments in this field, conducted in a number of countries, it is recommended to abandon the approach based on the positivist point of view. For a long time, it dominated science in general and economic research in particular, but it continues to influence many researchers today. This conclusion should be taken into account in the formation of the structure and composition of regions’ welfare indices. The research materials are placed in a broad historical context. On the one hand, this made it possible to more vividly present the prerequisites, characteristics and consequences of repeated attempts to introduce universal basic income into the practice of social insurance, undertaken in different countries of the world (Finland, Canada, Kenya, Iran, India, USA). On the other hand, to reveal the possibilities and problems of using universal basic income as a tool to help overcome the dysfunctional development of certain territories, including mining regions.
  • ... This may suggest that a programme which is permanent, universal, unconditional, and subsistence level would not have a strong effect on labour supply. However, public opinion polling indicated that only 38% of people believed that the transfers would be permanent (Tabatabai 2012), and this may have influenced the labour supply response. Further, the value of payments decreased very rapidly, and may have ceased to provide a subsistence level income not long after implementation. ...
    Background Unconditional basic income is seen as a potential solution to decreasing job security and predicted automation of many routine jobs. The importance of upstream health determinants suggests that basic income could improve health and reduce health inequalities. Since the effects of a universal, permanent basic income would differ from those of a trial, extrapolation of impacts from existing evidence is difficult. However, studies of interventions that unconditionally provide substantial, regular payments to individuals or families can provide insights into the potential effects. We conducted a scoping review to identify and synthesise evidence that could inform the planning stage of potential basic income pilots in Scotland. Methods We searched eight bibliographic and eight specialist databases for articles published in English from database inception until April, 2017 (initial searches), and November, 2017 (later iteration). We included randomised controlled trials, quasi-experiments, qualitative studies, and controlled before–after studies reporting any outcome of unconditional payments for low-income people or the general population. Studies conducted in low-income countries were excluded. Initial searches indicated that there were important studies of other interventions, so relevant search terms were incorporated in further iterative searches. Results were screened by one reviewer and a second reviewer checked a 10% sample. Data were charted and thematically analysed, following recognised scoping review approaches. Findings From 1591 papers identified, we included 28 studies of ten interventions implemented in a range of contexts that used various evaluation methods. The interventions were heterogeneous, but some were universal and permanent, and all provided substantial, regular payments unconditionally. Studies measured effects on employment, health, education, crime, and other social outcomes. Evidence on health impacts was mixed, with some studies finding strong positive impacts on outcomes such as birthweight and mental health, whereas others reported no effect. There was some evidence that effects were stronger in more at-risk groups. Most studies reported little impact on labour market participation. Interpretation Fears of a large decrease in labour market participation due to basic income seem to be unfounded, but inference was often hampered by small samples or multiple intervention arms. Further small-scale pilots would be of limited usefulness. Funding What Works Scotland (ESRC ES/M003922/1, SPHSU15, and Scottish Government).
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    In December 2010, Iran launched a five-year program to reform its system of price subsidies. In the first of several stages, subsidies were partially cut by raising prices of fuel products and some other goods and services, in most cases, several-fold. The net proceeds were partly earmarked to finance a compensatory cash transfer program that pays every Iranian residing in the country the equivalent of $40–45 a month, unconditionally. The later stages of the reform will see further rises in prices and transfer payments in tandem until subsidies are entirely eliminated. This, in a nutshell, is the “Iran model” of basic income. It differs in some respects from the common conceptions of basic income in the literature and may therefore be more accurately termed a “de facto basic income.” The story of how this de facto basic income came into being and some of its early results are recounted elsewhere.1 This chapter focuses on the model itself, elaborating on its key features, its genesis, the challenges it faces, and some of its lessons.
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