A Historical Analysis on Iran’s Industrial Policy Documents and Proposing Policy Imperatives for the Years Ahead

Industrial policy is among instrumental programs and interventions that governments pursued proactively for at least a couple of decades in almost all the current industrialized nations. Iran, since the Pahlavi era, has adopted industrial policy with import substitution approach. Except a short period in 1960s, not much success is apparent from industrialization efforts. From 1990s, industrialization is in the public agenda by formulation of national industrial policy documents. Aside from the differences of four enacted industrial policy documents until March 2021, not much industrialization outcomes are evident. In this regard, this paper identifies and proposes industrial policy challenges and requirements by a qualitative and historical research in Iran. Data are gathered through 9 semi-structures interviews and secondary data including industrial policy documents, reports, briefs, news and papers. My results suggest that the future industrial policy documents need to put technological and production capability building at center and take into account alignment with key national policies, providing temporarily supports based-on merit and performance, creation of dynamic technological comparative advantage, sound prioritization of few high-potential sectors, export-oriented approach and enhancement of firm’s international competitiveness. Besides, a powerful organization in charge of industrial policy implementation, coordination and its continuous evaluation, beyond a thematic line ministry such a Ministry of Industry, Mine and Trade, is a key institutional requirement.