Toward a Capability Approach to Development and Industrialization in Iran: An Introduction

  • Pooya Alaedini


This introductory chapter of the volume starts out by discussing how increasing oil export revenues in the late 1960s and early 1970s allowed the Iranian government to embark on an industrialization drive through both facilitation of private-sector activities and direct initiatives. This strategy associated economic development above all with rapid growth in physical capital formation. Calling it an investment-oriented industrialization framework, the chapter discusses its limits and shortcomings. It further contends that the basic elements of the investment-oriented industrialization framework were not altered by the 1979 Revolution and through the postrevolutionary political economic shifts. Rather, they were deepened by intensifying the inward orientation of the economy both under a rubric of indigenization and due to international and domestic political economic circumstances. Significant investments have nonetheless been made in Iran’s manufacturing sector through five postrevolutionary national development plans, and there have been some achievements in certain capital-intensive industries, which have created an industrial base in the country. Iran’s manufacturing sector however remains underdeveloped and problem-laden with important implications for the country’s economic development trajectory. The chapter calls for the adoption of a capability approach to industrial development in Iran, which requires active government involvement to nurture the manufacturing sector with the aim to realize sustained and more equitable per capita income growth and create adequate employment for the country’s growing, young, and increasingly educated population. It further provides an overview of the chapters in the volume in its final section.


Industrial development Investment Employment generation Productive capabilities Iran 


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Authors and Affiliations

  • Pooya Alaedini
    • 1
  1. 1.Department of Social PlanningUniversity of TehranTehranIran

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