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Association: Name: International Studies Association URL: http://www.isanet.org
Citation: URL: http://www.allacademic.com/meta/p100612_index.html Direct Link: HTML Code:

Mazaheri, Nimah. "Economic Development, State Stability, and the Private Sector in the Middle East: The Cases of Iran and Kuwait" Paper presented at the annual meeting of the International Studies Association, Town & Country Resort and Convention Center, San Diego, California, USA, Mar 22, 2006 <Not Available>. 2009-05-25 <http://www.allacademic.com/meta/p100612_index.html>

Mazaheri, N. , 2006-03-22 "Economic Development, State Stability, and the Private Sector in the Middle East: The Cases of Iran and Kuwait" Paper presented at the annual meeting of the International Studies Association, Town & Country Resort and Convention Center, San Diego, California, USA Online <PDF>. 2009-05-25 from http://www.allacademic.com/meta/p100612_index.html

Publication Type: Conference Paper/Unpublished Manuscript Abstract: In developing countries, does the state?s approach to the private sector impact state stability? Under what conditions can economic development programs lead to state instability? In this paper, I will consider these two questions in light of the experiences of Iran and Kuwait during the twentieth century. Through an examination of the private sectors in both of these countries, I will show how economic development policies can easily result in state instability due to the kinds of policies adopted by states ? particularly the way that development planners approach the traditional commercial classes of the private sector. While both countries sought similar development goals in the post-war era, the process of industrialization and economic modernization spelled out an unclear future for the various groups of merchants, traders, and artisans of the private sector that had traditionally dominated the economy for centuries. During the ?development boom? of the 1950s-1970s in the Middle East, state leaders were essentially faced with two options: on the one hand, co-opt or ?buy off? the traditional commercial classes in the economic development program (as was done in Kuwait); or on the other hand, marginalize the traditional private sector to make way for foreign or new state-sponsored entrepreneurs (as was done in Iran). It is my contention that these economic policy approaches made the difference between, in the former, the fostering of a stable regime, and in the latter, the emergence of a fragile state that was ultimately overthrown by a social movement that was heavily funded by these very same commercial classes. Given the diverging results between Iran and Kuwait, the question arises: What factors influence a state?s decision to co-opt or oppose the economic interests of the traditional private sector? Although the decision ultimately lies in the hands of individual economic planners, it is my contention that the state is responding to their (often uninformed) assessment of the relative economic and political strength of the traditional commercial classes.In essence, my paper looks at the differing experiences of Iran and Kuwait to provide insight into the ways in which economic development should (and should not) proceed in developing countries that rely heavily on the informal and ?traditional? sectors of the economy prior to industrialization. Alongside the analysis of my two cases, my study also informs important issues in the literature on social movements and rentier states.

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