The Effects of Domestic Policies of Governments Before and After the Revolution in Alignment with the Command Economy Model

Abstract

This article examines the historical trajectory of state intervention in Iran’s economy from the Qajar period to the post-Islamic Revolution era within the framework of the command economy model and political economy analysis. The central objective is to evaluate how state-centered economic policies shaped institutional development, market structures, and economic performance across different political regimes. Using a descriptive–analytical method and library-based research, the study compares the economic roles of successive governments—including the Qajar state, the Pahlavi regimes, and post-revolutionary administrations—by analyzing patterns of ownership, regulation, development policy, and state–market relations. Findings indicate that despite major political transformations, continuity in directive economic governance remained a dominant feature of Iran’s economic structure. During the Qajar era, weak institutions, fiscal inefficiency, and patrimonial governance limited capital accumulation and economic modernization. The Pahlavi period introduced modernization and industrialization but strengthened centralized state control over markets and social groups. After the Revolution, ideological debates over property, justice, and economic management ultimately reinforced a large state presence, particularly under wartime conditions and rentier economic structures. Later reformist and liberalization efforts sought to rebalance relations between state and market but faced structural constraints, institutional weaknesses, and persistent monopolistic arrangements. The study concludes that economic underperformance in Iran is less a consequence of state presence itself than of inadequate institutional design, weak regulatory frameworks, and limited competitive environments. Sustainable development requires a developmental, law-based, and accountable state capable of fostering competitive markets, strengthening private-sector capacity, and reducing rent-seeking behavior through institutional reform.