Political Economy of Populist Rentier Governments in Iran: A Case Study of Ahmadinejad's Presidency (2005-2013)

Various studies indicate that rentier governments possess a significant capacity to empower populist leaders due to their reliance on oil revenues as a primary source of income. Economically, rentier-populist governments tend to be redistributive while exhibiting politically radical and authoritarian tendencies, generally representing the interests of the lower classes. While rentier governments are widespread globally, with notable populist models in Latin America, Mahmoud Ahmadinejad's rise to power in Iranian 2005 epitomized this approach, allowing him to implement his populist policies. This research is grounded in Rudiger Dornbusch and Sebastian Edwards' (1995) political economy theory, aiming to examine the dynamics of Ahmadinejad's government through the lens of the political economy of populism. The primary question addressed is: What role did oil revenues play in the execution of Ahmadinejad's populist policies? The hypothesis posits that the policies implemented during Ahmadinejad's tenure were fundamentally populist in nature, reliant on oil revenues for their viability. By leveraging oil income, Ahmadinejad sought to enact populist policies and redistribute wealth to the underprivileged and marginalized sectors of society, ostensibly working to alleviate poverty and promote social justice. Ahmadinejad initiated his populist economic policies upon taking office. Despite rising oil revenues, these policies failed to bolster Iran's economic and institutional infrastructure. Coupled with ineffective economic management, his administration faced multiple structural crises. Indiscipline in financial practices, high-risk program implementation, and a lack of reliance on expert advice contributed to a vicious cycle of economic turmoil. Issues such as mounting bank debts, currency devaluation, increasing liquidity, financial deficits, diminished economic growth, inflationary stagnation, and rising unemployment characterized the fallout from his policies. Not only did his government fail to reduce poverty among the lower classes, but his strategies also exacerbated inequality, deepening economic instability and widening social divides. The political and social challenges stemming from his policies have lingered in Iran's economy for over a decade, likely leaving enduring impacts for years to come.

Populist Economics, Populist Government, Oil Populism, Oil Revenues, Populist Economic Policies