A Perspective on Iran’s Post-Revolutionary Political Economy

The bleakest spot on the Islamic Republic’s twenty one-year performance record, and a constant threat to its survival, has been the economy. Downgraded by the regime’s founding father as unworthy of revolutionary pursuit, and described in the 1979 Constitution as "not an end in itself, but a means intended only to contribute to the attainment of the ultimate goal, namely, "a movement toward God," the post-revolution Iranian economy has remained the regime’s Achilles heel. Striving in vain to find an "Islamic model" which could put an end to what the revolutionaries called "crass materialism" and "consumerism," the national economy has been managed in an ad hoc, improvised, and inconsistent manner. An unstable mixture of capitalism, populism and pragmatism with some ornamental Islamic topping has served as its anchor. As a result, the economy has moved from one crisis to another in an almost uninterrupted course.

Thus, the consensus among domestic and foreign observers remains that Iran’s economy is now in worse shape than it was before the revolution. Judged by official statistics, all common indicators of economic health show negative signs. Per capita income is one-third less; income gaps among households has widened; economic growth is lower; inflation is higher; unemployment and underemployment are more extensive. Furthermore, the economy’s slow growth, double-digit unemployment, double-digit inflation, and continued fiscal deficits, are accompanied by publicly acknowledged shortages of housing, classrooms, teachers, health clinics, and vital prescription drugs; significant air and water pollution; considerable soil erosion; and alarming deforestation.

Jahangir Amuzegar
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