Catallaxy and Justice: An Inquiry of the Distributive Effects of the Intervention on the Catallaxy (Case Study: Isfahan City)

Abstract

This paper has surveyed the social effects of public policies, with introducing the concept of the catallaxy, which has been introduced at first by the famous institutional economist, Fredrick August von Hayek. For this, at first, we have introduced the economic concepts of the justice and have shown that for providing justice, economic effectiveness must be undertaken. Then, with the introducing of the catallaxy and its concept, structure, characteristics, parts, and mechanism, the reader will find the importance of catallaxy and its role on the economy. The reader also will find that the intervention on catallaxy will decrease the number of possible options for economic agencies and it means the lower efficiency of the economic policies. Then with applying the common analytical economic instruments, we have shown that decreasing of efficiency led to decrease the social justice. Along with introducing the characteristics of the city as one of the catallaxy examples, we have introduced an Autoregressive Model of relation between catallaxy interventions and inequality in urban services for the ten urban districts of Isfahan city. We estimated the model by using the panel data techniques for the period of 1996-2005. The results have shown that inequality in urban services in Isfahan is the results of the lagged structure of inequality in urban services, on one hand, the share of catallaxy confusing revenues of the Isfahan Municipality, on the other hand.