Comparative Study of the Effect of the Increase of Oil Revenues on the State's Policymaking Regarding Institutions of Economy and Politics: During the Years 1973-1977 And 2005-2010

From 40’s on, Iran has earned most of its revenue from oil. Oil prices have seen multiplying increases in certain periods. During the time of these increases, contrary to the expectation that this increased revenue be spent on development, the policies employed by the state have created more issues and problems for the country. The state policies during oil booms have a direct effect on social institutions and the institutional framework. In this study, the effect of state policies on social institutions of economy and politics during the years 1973-1977 and 2005-2010 shall be investigated. The main question of the study is the reason for the similarities in state policies for social institutions during these two periods. The purpose is to recognize the reasons regarding why these two governments, despite their ideological, structural and historical differences, have taken similar decisions during oil price shocks, and that these policies produce similar results. In order to investigate the issue at hand, Terry Lynn Karl’s Weak State theory has been used, and the Rentier State theory has been employed as an essential reason but not a sufficient one. The method of study is comparative-historical. The path-dependency technique has been used for the historical study of the weak state, and to compare the findings a contingency table has been created. The findings show that through the historical study of the issue, the weak state presents itself as the main reason, and the rentier state and the multiplication of oil prices serve as essential reasons but not sufficient ones regarding the issue