Friction of Opposing Forces

This is an article that I wrote for the Tejarat-e Farda Magazine a few years ago. I believe the main points are still valid in explaining the drivers of the current unsatisfying situation in Iran.

Read the original article in Persian

The following is an AI-generated English translation, which captures the key points well enough.

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Why has governance in our country ended up here?

Why are people dissatisfied and increasingly convinced that the country’s management cannot cope with its problems? Are the many crises confronting Iranian society simply the result of government inefficiency?

Economists and social scientists have offered many explanations for the decline in public trust in the country’s governing system. Is the problem with the people, who elect and support weak governments? Or is the problem with the methods used to govern the country? Are the methods flawed, or have the goals of the state and society drifted apart? Answering these questions requires broad empirical and field research, as well as a deep understanding of Iranian society from economic, social, political, historical, and international perspectives.

The Resource Curse

One of the most frequently discussed theories in explaining these questions is the resource curse. According to this view, the existence of oil is a major reason for the widespread inefficiencies in Iran’s governance structure. These inefficiencies show up at many levels, including education, management, and labor productivity. In this analytical framework, because governments have access to oil revenues, the normal accountability relationship is inverted. In a healthy system, it is the government that must answer to the people.

When governments rely on citizens’ taxes, people demand accountability and transparency, and they expect tax revenues to be spent clearly and in line with public needs. But when a government does not depend on taxation and instead finances itself by selling underground wealth, it not only becomes less accountable to citizens, but can also stabilize its position by distributing those revenues among its most loyal supporters.

As a result, competition among people shifts away from improving productive efficiency and service delivery, and toward gaining access to distributed rents. In this way, social incentives are redirected into a non-constructive — and often destructive — path. In such systems, political groups that genuinely represent the people fail to emerge, and therefore a healthy and effective party system does not develop. In that environment, the aggregate preferences of society are not transmitted to the government; rather, the state’s preferences are imposed on society through channels of income distribution.

The absence of a party system makes government less accountable. But one may ask: why have some countries with abundant natural resources, including oil, not suffered the same fate? Norway is a well-known example. So merely having such resources cannot, by itself, explain the current inefficiencies in governing the country.

The Decline of Knowledge and Expertise

Another group of thinkers emphasizes the declining importance of knowledge and expertise, especially in the humanities and social sciences, across different levels of national management. The roots of this problem can be traced to several simultaneous currents.

Superficial readings of religious texts

The first is the dominance of certain non-specialist readings of religious texts, which has caused many modern human achievements — especially in the human sciences — to appear in conflict with religious teachings. For example, in early Islam, the prohibition on usury (riba) was largely because lending at exploitative rates was often a tool for the wealthy to prey on the poor. In that context, banning usury was an ethical and humane measure.

But the concept of interest in modern financial markets and instruments is fundamentally different from the notion of riba prohibited in Islam. It does not inherently carry the same meaning or function of exploiting weaker social classes. There are many examples like this. As a result, being trapped in superficial interpretations of religion, and failing to grasp its deeper ethical and human-centered message, has blocked the use of many beneficial human achievements — or altered them so much that they no longer function effectively in solving problems.

Equating expertise with Westernization

The second current is the tendency to equate expertise and modernity with Westernization or West-leaning attitudes. It is no secret that the center of scientific progress — especially after the Industrial Revolution — has largely been in Western countries. Only in recent decades have China, Japan, and parts of Southeast Asia begun to establish themselves among the leaders of science and technology. At the same time, many policies in our country are defined in opposition and hostility to the West.

As a consequence, highly capable specialists and scholars educated in Western universities are often viewed as overly compliant or “Westernized.” They are either excluded from top management positions or denied the freedom to make major decisions. The result is that the country’s most qualified people become sidelined — or choose emigration.

The overemphasis on indigenization

Another trend is the overemphasis on indigenizing science and technology. In practice, this often turns into trying to reinvent the wheel — something that, in today’s fast-moving, competitive, interconnected world, has yielded little besides falling behind the global frontier of knowledge. To be sure, adapting science and technology to domestic conditions is, in itself, a sensible and desirable goal. But what is often overlooked is the nature of science in the contemporary era. Modern scientific progress rests on two main pillars:

1. Incremental work — each study or innovation adds a small piece to previous work and moves it one step forward.
2. Collective work — most serious scientific work in major universities is no longer done by one individual alone, but through collaboration among many scholars across institutions and even across countries.

Therefore, reducing the connections between domestic scientific centers and the wider world, and trying to do everything from scratch in the name of indigenization, deprives our scientists both of collaborative work and of access to international research and the opportunity to improve upon it.

Extreme credentialism

Another factor that has undermined our scientific institutions’ core function is extreme credentialism, especially at the graduate level. The idea that everyone — particularly public officials — must hold a doctorate, and the habitual use of “Dr.” as a near-automatic title for every official, has become a major pathology. It has pushed universities away from deep, useful research and toward becoming factories for printing degrees.

Alongside this flood of degrees from domestic universities, a kind of illusion of knowledge has emerged in some individuals — leading them, despite lacking sufficient depth, to casually dismiss scientific theories. We often hear officials say that scientific theories (especially in economics) found in “Western books” do not suit our society, and that we need indigenous theories instead. This mistaken view stems from a misunderstanding of what science is, combined with an inflated sense of knowledge produced by the mass distribution of low-value degrees.

A closed economy weakens science

The last trend that should be mentioned is the effect of a closed, noncompetitive economy on weakening the status and substance of scientific knowledge in the country. In a competitive economy, firms turn to universities to improve their ability to compete and sell goods and services. Universities and research centers, drawing on up-to-date science and innovation through commissioned research, then help improve those goods and services. This exchange is highly valuable for both sides.

On one hand, universities gain sufficient revenue to grow and develop, and their research is directed toward solving real social needs. On the other hand, firms improve their products and services enough to compete with foreign alternatives, which supports export growth, economic growth, and ultimately wealth creation for society.

Taken together, these trends have eroded the real (not merely rhetorical) status and respect of knowledge and scholars. Macro-level decision-making has become increasingly empty of scientific content, and many actions have become ad hoc — focused only on managing day-to-day crises.

Parallel Institutions and Fragmented Governance

Another explanation, from the perspective of sociologists, concerns the kinds of levers used to stabilize and consolidate the political system. Over recent decades, governance in Iran has relied heavily on mobilizing the general public — especially lower-income groups. Government strategies for mobilizing people against internal and external threats have centered on creating parallel institutions for distributing income and incorporating segments of formerly absent social groups into the country’s management structure.

Although such parallel institutions have at times been useful in specific areas such as road construction and public health, they have also fragmented the country’s center of decision-making. Multiple decision hubs have produced coordination failures and a complex bureaucracy that, at critical moments, pushes the system into decision-making crises.

At the same time, each of these parallel institutions has become a power base for a group of managers and has brought substantial privileges. As a result, eliminating or limiting them meets heavy resistance and imposes high political and economic costs. One recent example was the unauthorized financial institutions, which inflicted serious damage on the economy and generated intense public dissatisfaction; correcting that problem imposed a very high cost on the country.

The Erosion of Meritocracy

A localized and restricted version of democracy — used primarily to incorporate loyalists into the governing structure — has contributed to the entry of inexperienced and underqualified managers into top decision-making levels. To adapt themselves to positions they themselves may inwardly feel they do not fully deserve, many of these managers turn to university education while already in office. Evidence of this can be seen in the large number of senior officials who obtained academic degrees during their tenure.

This pathological degree-seeking, while holding heavy government responsibilities, has done almost nothing to increase the actual knowledge of these managers. At the same time, it has distracted them from focusing on solving the problems of their sectors. Since there is no systematic and precise mechanism for evaluating performance and monitoring governments in general — and managers in particular — once these individuals enter the system, they devote their efforts not to achieving predefined goals efficiently, but to preserving their positions for as long as possible.

To further consolidate their positions, they appoint relatives and acquaintances around themselves, draining the system even further of meritocracy.