Oil Rents And Democracy In Iran 1997-2010: Re-Visiting The Rentier State Theory

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Date
2015-05
Authors
Najdi, Youhanna
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Abstract
Iran is a resource-rich country that severely suffers from a lack of democracy. The purpose of the present research is to study the effect of oil revenues on democracy in Iran from 1997 to 2010. In order to do so, the author re-visited the rentier state theory and applied it to Iran’s present condition to explain how oil wealth has hindered the democratization process in Iran. A qualitative research was conducted using the case study approach and content analysis. The secondary data was collected from official reports of the Iranian government as well as from reports of reliable international organizations. In the first section of this study it is evidenced that Iran can be categorized as a rentier state, based on the definition of the theory and its vital requirements. The share of oil income in Iran’s economy, marginal role of taxation system, and government ownership of the oil industry were highlighted in this context. Throughout the study, it was identified that there is a negative relationship between oil income and democracy in Iran. In other words, positive oil price shocks hindered the democratization process, while less oil revenue led to political reforms. The results of the study also demonstrated that oil wealth has helped the government to stay in the power largely due to the major support of the Islamic Revolutionary Guard Corps (IRGC), which is the main military power in the country. This finding, in particular, was in the line with the rentier state theory which emphasized the importance of military groups in rentier states. The author also analyzed the negative effects of oil revenue as it pertained to three government indicators including the Rule of Law, Control of Corruption and Political Instability and Lack of Violence; Whereas, Voice and Accountability were found to have no relationship to oil wealth in Iran. Finally, it was concluded that, according to the rentier state theory, oil wealth caused an increase the role of military and Paramilitary groups in Iran from 1997 to 2010 which had a negative influence on the country’s democratization process, control of corruption, and rule of law.
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