Please check out the recent publication by OOW member Masoud Movahed. 2020. “Industrializing an Oil-Based Economy: Evidence from Iran’s Auto Industry.” Journal of International Development 32 (7): 1148–70.

Abstract

Two theoretical paradigms namely, the ‘resource curse’ and ‘developmental state’ wouldpredict that industrial development in countries with abundance of capital-intensive natural resourcesand in states with patrimonial tendencies is doomed to failure. Iran’s success in developing adynamic auto industry, which in 2011 became the world’s 12th largest automobile manufacturer with1.6 million vehicles produced per year seems to contradict these perspectives. How was this technicalcapacity created in an oil-based economy—which provides little incentive for industrialization—and, in a country that has been under the United States and international sanctions since 1979Revolution? In this paper, I will expand on the implications of these theoretical traditions to identifythe structural factors that enabled the Iranian state to develop a large automobile sector and relativelydiversify the economy.