The Optimal Share of Property Rights Protection Expenditure in Total Government Spending: The Case of Iran

Abstract The main purpose of this paper is to obtain the optimal amount of expenses of government relating to the protection of property rights (PPRs). To achieve these purposes we have introduced concept of social intelligence with respect to PPRs and then developed different growth model from existing literature. In the second step the optimal share of government spending on the PPRs is calculated.  The theoretical results show inverse relationship between budget deficits and government spending in the PPRs. In other words, with increasing amount of government deficit, government reduced spending of PPRs.  The results of calibration for Iranian economy show that, the growth rate of spending to PPRs should be equal to 31 percent for having sustainable economic growth rate of 6 percent.