The Rise of Iran Auto: Globalization, liberalization and network-centered development in the Islamic Republic

This dissertation makes contributions to the field of sociology of development and globalization. It addresses how Iran was able to obtain the state capacity to develop the automobile industry, and how Iran transferred the technology to build an industry with autonomous, indigenous technical capacity Most theories of the developmental state assume that industrial transformation requires capable and coherent development bureaucracies that are “autonomous”— insulated from particularistic private interests yet benefiting from networks connecting them to relevant private industrial actors. Scholars agree that political factionalism and Islamic institutions have transformed Iran into an economically incoherent and rent-seeking predatory state. Iran’s success in developing an automobile industry with high local manufacturing content while becoming the world’s eleventh-largest producer of passenger cars and the fifth-largest in the global south seems to contradict this perspective. This dissertation offers two contributions to existing theories of the developmental state: First, it shows that nationalists with a project of industrialization can decouple a key set of organizations sufficiently from other parts of the state apparatus to create an effective “island of efficiency” within a specific industrial sector. Second, sequencing in the evolution of the state’s role may be important in facilitating effective development. Construction of Iran’s auto industry resulted from a process of collective action by elite managers within the industry to first establish elite autonomous alliances within the state and then to establish network connections to economic actors outside the state who could help defend the project from predatory opponents.Recent network centered development scholarship has emphasized the role of ties to multinational enterprises, foreign direct investment, and R&D centers as the primary conduits through which technology is transferred to build indigenous local technical capacity in the current global economy. This dissertation builds on these observations by introducing engineering consulting firms as key network actors for the development of automobile industries. I will show that a country can develop an industry with greater indigenous, local technical capacity if it establishes ties to engineering consulting firms whose core task is to transfer ownership of the technology to local firms. This case suggests that the development of an automobile industry does not require reliance on multinational investment as a primary source of technology. In addition, by establishing ties to engineering consultancies, even countries isolated from global institutions can engage in more rapid technological learning and industrial upgrading when more conventional ties to sources of technology are unavailable