Iran's Political Economy since the Revolution

Since its founding in 1979, the Islamic Republic of Iran has struggled to balance its political ambitions with its economic needs. Iran possesses immense economic potential. It is blessed with oil and gas and an educated and able citizenry, is situated at the crossroads of Central Asia and the Middle East, and has a vast coastline that provides easy access to Asia, Africa, and beyond. Iran has all the makings of a regional power and important player in the global economy; however, it has never come close to realizing that potential. Both before and after the 1979 revolution, recurring factors such as corruption, political hubris, and social inequities have bogged down its progress.The revolution might have changed the politics of state, and those in charge of it, but it continued a culture of corruption and patrimonialism in politics and the economy. Unlike the Pahlavis, who strived to build Iran into a modern, powerful state by focusing on military capacity and close relations with the West, the Islamic Republic has privileged a spirit of independence above all else. For most of its history, the Islamic Republic's approach has rested on a consistent favoring of antagonisms over cooperation with outside states. Although the Islamic Republic has had improving relations with Russia, China, and India over the last two decades, and was able to strike an agreement with the P5+1 on its nuclear enrichment program, it possesses only a single state ally (Syria) and has mostly poor relations with its neighbors. What is more, Iran remains in a state of effective conflict with Israel, Saudi Arabia, and the UAE. In sum, Tehran's foreign and strategic policies, which have largely alienated Iran from its region and led to costly sanctions, have had a severely negative impact on its economy.But for all of its challenges, the Islamic Republic has managed to navigate economic troubles through a variety of creative mechanisms, which have mostly favored the ruling elite, connected familial networks, and regime supporters in the traditional petite bourgeoisie. Those choices have kept the regime's leadership in power and allowed some to succeed in Iran despite sanctions and the country's turbulent foreign relations. That story (how the Islamic Republic moved past the legacies of the Pahlavi monarchy and forged its own path toward political and economic independence) is explored in Suzanne Maloney's expansive Iran's Political Economy Since the Revolution.In Maloney's view, Iran's political economy is the product of four intersecting factors: First, there are those features endemic to Iranian society, writ large, here termed “the legacy of Iran's economic and political development prior to the 1979 revolution.” Second is the structure of the Islamic Republic's political system, which has led to a “persistence of factional conflict and the bifurcation of authority.” Third is a variation of the resource curse and “the state's control of [the] massive revenues” derived from its resource exports. Fourth is the strain caused by Iran's persistent antagonisms and foreign policy inclinations, which Maloney calls “Iran's tormented relationship with the world” (13–15).Those factors have combined to make Iran's system and economic health appear precarious. Indeed, it is that issue—the perception that economic instability has kept the Islamic Republic on the precipice of collapse—which Maloney's work strives to address. Situating the book in the larger tensions between successive US governments and the Islamic Republic, Maloney argues: “Iran's flailing economy is frequently perceived as the Achilles’ heel of the theocratic government, and nearly every effort that Washington has undertaken to persuade or coerce its leadership has had economics at its heart.” The perception of economic fragility has led numerous outside observers and officials to predict the collapse of Iran's revolutionary system, predictions that have shown to be misplaced, or as Maloney suggests, “at least premature.” Rather than offer a prediction, Maloney strives to demonstrate that “the relationship between economic constraints and policy change or moderation exists,” even though any substantial change is likely to be “neither linear nor immediate.” Thus instead of offering a definitive road map of where the Islamic Republic is headed, the book sets out more broadly to address “the dilemmas that confound Washington and the rest of the international community about the utility and limitations of economic pressure in reshaping Iran's decision making and its future trajectory” (15–16).Maloney addresses these issues through a historical narrative of modern Iran that places political and economic development at the center. The second chapter is a sweeping history of prerevolutionary Iran's political economy from the late Qajar period through the Pahlavis. The remaining seven core chapters move chronologically through the Islamic Republic's nearly four-decade history. The third chapter focuses on the revolution and the sweeping changes instituted by Ayatollah Ruhollah Khomeini and the fledgling regime's leadership. The fourth chapter covers the Iran-Iraq war and its devastating effects on Iran's social fabric and economic health. The fifth chapter examines the postwar reconstruction effort led by President ʿAli Akbar Hashemi Rafsanjani, and the remaking of Iran's ravaged economy. The sixth chapter explores the reformist impulses of the Khatami administration and the fierce opposition that reformism encountered in the political realm. The seventh chapter considers the Ahmadinejad presidency, increasing tensions with the West, and the fundamental mismanagement of Iran's economy. The next two chapters are thematic and more closely concentrate on the complex relationship between the Iranian economy and its resource-driven energy sector (chapter 8), and the Islamic Republic's attempts to navigate through the economic toll of sanctions (chapter 9).Altogether, Maloney's book is a readable account of contemporary Iranian political and economic development. It adeptly explores the many facets, complexities, and contradictions that have fueled and shaped the Islamic Republic's experience. Because it is a broad history, the sources it relies on are often secondary or English-language reporting. But what it lacks in novel source material it makes up for with cogent argumentation and thoughtful analysis. It is a book that will be useful to teachers and students, as well as informative for more general audiences, including bookish policymakers. It is also highly relevant, along with much of the strong scholarship that has come out over the last half decade on aspects of Iran's economy, because economic factors continue to shape Iran's present. In particular, 2018 has witnessed numerous protests across Iran that have been driven by social and political grievances rooted in Iran's lasting economic disorder. Those protests have been instigated and capitalized on by both regime supporters and detractors, and eventual analysis of their provenance will likely reveal how economic hardships can be harnessed and exploited by all sides of Iran's social and political divide. Maloney's work is helpful in making sense of what lies beneath episodes such as these and explaining how the Islamic Republic has managed to carry on despite them

Economics · Economy · Political economy · Political science · Politics · Islamic Studies and History · Politics and Conflicts in Afghanistan, Pakistan, and Middle East