An Evaluation of Iran's First Development Plan and Challenges Facing the Second Plan

This paper examines the results of the Islamic Republic of Iran's First Economic, Social and Cultural Development Plan (1989-1993),including a discussion of the main contributing factors. It also offers a prospective assessment of what the Second Plan (1994-1998) might achieve, given domestic and international challenges, and the lessons learned from the First Plan. The analyses demonstrate the strengths and weaknesses of the plans, shed light upon errors in policy-making and areas needing reform, and provide a realistic appraisal of the state's capabilities in managing the economy. The study employs an empiricist model, enlisting field surveys and current economic statistics, and an integrated approach to economic, political and social forces. In dissecting the chief causes of economic malaise, the paper distinguishes between two levels of obstacles: factors relating to vision and implementation of the plans, and the deeply entrenched structural-institutional problems that cripple the economy in the long run. The First Plan receives a mixed, though predominantly negative review. The prospects for the success of the Second Plan remain gloomy, unless the country's politico-economic culture is changed and its foreign policy takes a more realistic turn.

* Abstract prepared by the author

Hooshang Amirahmadi
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