Iran's Political Settlement and Challenges for Effective Industrial Policy

Document Type : Research

Author

Researcher at Technology Studies Institute (TSI.ir), Tehran, Iran.

Abstract

In recent years, the framework of political settlement to understand the differences in the performance of institutions in different contexts has been considered by researchers and policy makers around the world. Contrary to conventional analysis, which limits the failure of institutions to the capability of the state or cultural factors, this framework holds that the distribution of power determines the effectiveness of an institution. The distribution of organizational power of stakeholders determines whether these groups support, resist, or distort a particular policy or institution based on their "interests" and "capabilities." Thus, by understanding the distribution of organizational power, one can understand the reasons for the not so successful performance of a policy or an institution in a particular political context. In this study, by examining the developments of Iran's political settlement, an attempt was made to examine the challenges of using industrial policy in the political and economic context of Iran. The macro-implications of the Iranian political settlement show that the short-term horizon and low executive capacity of the government, which is the result of a competitive patron-client political structure alongside influential companies, have greatly increased the risk of policy capturing. Setting precise, specific and conservative goals can increase the chances of industrial policy success to some extent. Supporting wholly privately owned enterprises with less political influence can also be another way to reduce the risk of protectionist policies to be captured. Finally, it should be noted that in the current political settlement of Iran, the capture of government supportive policies by SOEs and para government companies is likely to be very high, and therefore any supportive policy should be formulated according to this policy trap.

Keywords

References

References
Abrahamian, E. (1982), Iran between Two Revolutions, Princeton University Press.
Andreoni, A. (2017), Anti-Corruption in Tanzania: A Political Settlements Analysis, Tanzania: Working Paper.
Bashirieh, Hossein (2013): An Introduction to the Political Sociology of Iran during the Islamic Republic, Tehran: Negahe MoAser (in Persian).
Dehbashi, H. (1393), Economy and Security; Memoirs of Dr. Alinaghi Alikhani, National Documents and Library Organization of the Islamic Republic of Iran (in Persian).
Fawzi, Yahya (1395), “Transformation of Governments and Economic Performance in the Islamic Republic of Iran”, Contemporary Political Essays, 7 (21) (in Persian).
Fukuyama, F. (1995), Trust: The Social Virtues and the Creation of Prosperity (no. D10 301 c. 1/c. 2), Free Press Paperbacks.
Iranian Researchers Association (1372), Iran on the Threshold of 2000, Paris (in Persian).
Jafartash Amiri, Barzin (1399), “Industrial Development and the Challenges of Rent Management” (Case Study: Automotive Industry), (in Persian).
Katouzian, H. (1981), “The Political Economy of Modern Iran: Despotism and Pseudo-Modernism, 1926-1979”, Springer.
Karim, Mohammad Hossein, Vahid Shafafi Shahri, and Leila Nasri (1394), “Evaluate the Privatization Process in Line with the General Policies of Article 44 of the Constitution (Increase the Share of the Private Sector)”, Strategic and Macro Policies, 3 (11), (in Persian).
Keddie, N. R. and Y. Richard (2006), Modern Iran: Roots and Results of Revolution, Yale University Press.
Kelsall, T. (2016), Thinking and Working with Political Settlements, London: Overseas Development Institute.
Khan, M. (1999), “The Political Economy of Industrial Policy in Pakistan 1947-1971, Department of Economics”, SOAS, University of London, UK.
Khan, M. (2010), “Political Settlements and the Governance of Growth-Enhancing Institutions”: .
Khan, M. (2011b), “The Political Settlement and its Evolution in Bangladesh”: .
Khan, M. (2011a), “India's Evolving Political Settlement and the Challenge of Sustaining Development”: .
Khan, Mushtaq (2018), “Political Settlements and the Analysis of Institutions”, African Affairs, (117) 469.
Lavers, T. and S. Hickey (2015), “Investigating the Political Economy of Social Protection Expansion in Africa: at the Intersection of Transnational Ideas and Domestic Politics”, ESID Working Paper, no. 47, Manchester: Centre for Effective States and Inclusive Development.
Levy, B. and M. Walton (2013), “Institutions, Incentives and Service Provision: Bringing Politics Back in”, ESID Working Paper, no. 18, Manchester: ESID.
Lindemann, S. (2008), “Do Inclusive Elite Bargains Matter? A Research Framework for Understanding the Causes of Civil War in Sub-Saharan Africa”, Crisis States Research Centre Discussion Paper 15, London: London School of Economics.
Milani, Abbas (1393), A Look at the Shah, Toronto: Persian Circle (in Persian).
Majlis Research Center (1398), “Pathology of Lack of Industrial Development Strategy in Iran”, no. 1, Serial no. 16623 (in Persian).
Nateghianfar, Sarah and Fatemeh Amiri Pari (1389), “Pahlavi era Councils”, Remembrance of my Days (in Persian).
Nili, Massoud and Mohsen Karimi (1396), Planning in Iran 1356-131, Ney Publication (in Persian).
North, Douglass C. (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press.
Rocha Menocal, A. (2015), “Inclusive Political Settlements: Evidence, Gaps, and Challenges of Institutional Transformation”, University of Birmingham: Developmental Leadership Program.
Roy, P. and M. Khan (2017), “Nepal’s Political Settlement and Inclusive Growth: Not Quite Business as Usual”, SOAS, University of London and ACE RPC.
Saeedi, A. (1392), Technocracy and Economic Policy in Iran According to Reza Niazmand, Tehran: Lohe Fekr (in Persian).
Sanborn, C., T. R.Ramírez, and V. Hurtado Lozada (2017), “Mining, Political Settlements and Inclusive Development in Peru”, C Sanborn, TR Ramírez, V Hurtado Lozada.
World Bank (1989), Sub-Saharan Africa: from Crisis to Sustainable Growth, Washington DC: World Bank.
World Bank (1992), Governance and Development, Washington DC: World Bank.
World Bank (2011), World Development Report 2011: Conflict, Security and Development, Washington DC: World Bank.
International Political Economy Studies
Volume 3, Issue 2
March 2020
Pages 536-563

Files

History

  • Receive Date: 29 October 2020
  • Revise Date: 08 February 2021
  • Accept Date: 14 February 2021

Share

How to cite

Statistics