Institutional Pathology of the Government’s Approach to Industrial Development in the Islamic Republic of Iran (1979-1989)

This article is to consider analyzing the reasons of industrial sector slowdown in the economy and weakening the status of owners of infant industries during the first decade of the Islamic Republic of Iran from a neo-institutional perspective. For this purpose, “institutional-ideological” and “pre-institutional” conditions have been analyzed through historical context to clarify the institutional-historical mechanism leading to weakening of the industrial bourgeoisie and declining of the position of industry and industrial capitalism in the political economy of Iran. The methodological approach of this article is of the type of qualitative historical analysis in which documentary data extracted from official economic and statistical reports, memoirs, written works, and especially conversations with elites (governmental policy-makers and private industrialists active in the period under review), as well as historical, economic, and political analyses by other researchers and experts have been considered and utilized. The study shows that at the time of formation of post-revolutionary governmental and economic institutions in Iran, a set of interrelations institutional and pre-institutional factors in historical evolution and transformation shaped a path-dependent process in decision making institutions and mindset of decision makers in respect of economic policies of the country which was in contradiction with industrial capitalist development. This approach was one of the main factors inhibiting industrial growth and development in the country during the following decades.