Economic Research Institute, Tarbiat Modares University, Tehran, Iran.
Commodity smuggling is considered as one of the issues in the Iranian economy during last decades. Smuggling has had relatively high turnover during recent years and, thus, it has attracted much attention. Although smuggling is often assumed as an economic issue, its non-economic origins are so diverse that it can be regarded as a multidimensional process. Thus, a thorough analysis of this issue should take into account its different aspects. This paper presents an empirical analysis of commodity smuggling in the Iranian economy in terms of political economy. Accordingly, in a descriptive–analytical approach, along with the economic evaluation of smuggling, the non-economic (social, cultural, political, and geographical) dimensions are also studied from national and international perspectives. Results show that in order to fight against commodity smuggling, moving towards equilibrating the markets and relative prices through adopting proper foreign exchange and trade policies coincided with empowering border areas might be recommended.