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.