The Iranian State and the Oil Industry.

This paper traces out the history of the relations between the Iranian state and the oil industry from the beginnings in the late nineteenth into the twenty-first century. Even in the early decades of the twentieth century, these relations were influenced by the conflicting demands for economic rationality, economic justice, and nationalism. This caused a series of revisions and renegotiations between the state and the oil companies. With each of these renegotiations, the state has tried to bring the oil industry further under its control. In turn, this led to efforts to mitigate against the dictates of market efficient behavior that maximized profitability and replace them with those designed to maximize regime longevity. This paper argues that since the late 1990s, Iran has experienced yet another revision in the relationship between the state and the oil sector. Under pressure from the IMF and World Bank to begin economic liberalization, Iran took limited steps to loosen control over the oil sector in a way that allowed senior NIOC officials to capture key elements of this previously state-owned enterprise. This engendered broad resentment among the Iranian public sensitive to any hint that their nation?s resources being plundered for private gain while Iran?s economy as a whole remained stagnant. This paper demonstrates, however, that the period of state-capture, when new oligarchs bought-up privatized state-assets, gave way to a period of state revenge, when the entrenched elite used a combination of enticements and veiled threats to bring the oligarchs back into the state?s orbit. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]