Scorpion Hole A Historical Analysis of Sadi on Relationship of Politics and Economics of Iran as described in Golestan

In this paper by searching through our cultural heritage and tracing our rich literature we try to understand the historical roots of underdevelopment of Iran and to see if we can suggest any appropriate solution? We provide a positive answer substantiating it by drawing on institutional economics. We show in this paper how path dependency of the country has been deepened and explain the way institutional obstacles as described in the first volume of Golestan of Sadi imposed a brake on the country development. We find that Sadi has successfully described the impact of politics on economics and show how despotic regimes and its supported intellectual mentalities block the way of development by creating vested interest group and their own peculiar socio-economic and cultural order. The paper conclude that without creating efficient political market and opening historical dependency ties, the country would not meet its development target.