1. Where did the IRGC come from? How did and does it fit into the state-society nexus, according to Forozan and Shahi?2. How did the IRGC become an economic player?3. What changed for the IRGC after President Ahmadinejad gave way to Rouhani? What has stayed the same?4. What purpose do elections serve in Iran, according to Boroumand, and how has this changed over the life of the Islamic Republic?5. What does Boroumand’s analysis of the 2017 elections tell us about the state of the regime and the state of civil society in Iran today?
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The Military and the State in Iran:
The Economic Rise of the
Revolutionary Guards
Hesam Forozan and Afshin Shahi
The Islamic Revolutionary Guard Corps (IRGC) is a multilayered political, ideological, and security institution that has steadily acquired an increasing role
in Iran’s economy in recent years. This article analyzes the growing economic
and business involvement of the IRGC in the broader context of Iranian statesociety relations in general, and its civil-military dynamics in particular. More
specifically, we look at the political and socioeconomic processes within which
the IRGC operates at the interrelated levels of the state and society. This analysis
sets out the framework based on which we examine the IRGC’s increasing power
in the course of its engagements and various conflicts in both political and societal arenas, in particular its economic expansion under Mahmud Ahmadinejad’s
presidency. This article concludes by discussing the implications of the IRGC’s
rise on the economic policy of the government under President Hassan Rouhani.
For almost four decades, one of the most striking features of the Islamic Republic
of Iran’s political economy has been the ever-increasing business and commercial activities of the various institutions established or restructured in the wake of the revolution. These revolutionary entities have developed into giant economic enterprises with
little or no accountability to the central government, such as the Islamic Revolutionary Guard Corps (IRGC). Established in 1979 by Ayatollah Ruhollah Khomeini as a
paramilitary organization in charge of safeguarding the revolution and countervailing
the suspicious Imperial Army, the IRGC has evolved into one of Iran’s most powerful
political, ideological, and military conglomerates. By penetrating nearly all arenas of
the Iranian state and society, the IRGC has sought to enhance the regime’s support base
and its defense capability through popular mobilization and ideological indoctrination.1
Beyond the aforementioned multilayered functions, the IRGC has evolved into a
central economic force. Although there are no official data regarding the IRGC’s share
of Iran’s economy, it reportedly controls up to one sixth of Iran’s declared gross domestic product (GDP).2 The scope of the IRGC’s economic activities includes construcDr. Hesam Forozan is a former visiting researcher at Durham University. He is the author of The Military in
Post-Revolutionary Iran: The Evolution and Roles of the Revolutionary Guards (Routledge, 2015).
Dr. Afshin Shahi is an associate professor at the University of Bradford. He is the author of The Politics
of Truth Management in Saudi Arabia (Routledge, 2014) and the coauthor (with Ehsan Abdoh-Tabrizi) of
the forthcoming book Iran: The Shia State and the Sunni Minority.
1. Frederic Wehrey et al., The Rise of the Pasdaran: Assessing the Domestic Roles of Iran’s Islamic
Revolutionary Guards Corps (Santa Monica, CA: RAND Corporation, 2009), p. xi.
2. Parisa Hafezi and Louis Charbonneau, “Iranian Nuclear Deal Set to Make Hardline Revolutionary Guards Richer,” Reuters, July 6, 2015, https://reut.rs/2h1EBb8. To corroborate this figure, we
looked at the two previous estimates. The Guardian reported in 2010 that the IRGC controls up to
between a third and nearly two thirds of Iran’s economy. In the following year, an article by Elliot
MIDDLE EAST JOURNAL ✭ VOLUME 71, NO. 1, WINTER 2017
HTTP://DX.DOI.ORG/10.3751/71.1.14
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68 ✭ MIDDLE EAST JOURNAL
tion, the oil and gas sector, and even Iran’s financial, banking, and telecommunication
sectors. Chief among the IRGC’s economic venues is the engineering firm Khatam
al-Anbiya Construction Headquarters. According to its website, the firm has completed
1,800 projects.3
Despite the IRGC’s economic importance, the existing scholarship has mostly
paid only cursory attention to analyzing the origins of IRGC’s involvement in economic affairs and its subsequent enlargement. This article seeks to fill this gap in the literature by looking at the social and political factors that facilitated the group’s economic
rise over the years within the broader context of state-society relations.
This article begins by outlining the analytical framework used in the study by
drawing on the theory of state-society relations proposed by Joel Migdal. To analyze
the IRGC’s development and gradual rise as an economic actor, we incorporate the
state-society relations framework into the study of civil-military relations and also consider the state’s political and economic agenda. This provides an overall setting for the
empirical section of this article, which briefly surveys the IRGC’s development up until
2005. We then move on to the presidency of Mahmud Ahmadinejad (2005–13) and
examine the expansion of the IRGC’s commercial and economic enterprises, and its
public works, and its engagement in financial activities. This is followed by an exploration of the continuity and change in the IRGC’s economic activities under the current
administration of President Hassan Rouhani.
This research has benefitted from a variety of original sources. In addition to
surveying the relevant academic literature, we have used the Persian-language press
along with websites and print sources affiliated with the Revolutionary Guards and
other important political organizations, including the Expediency Council and the Iranian parliament, known as the Majlis.
THEORETICAL FRAMEWORK AND DISCUSSION
A notion that is taken for granted within Iranian studies in general and the literature on Iran’s military forces in particular, has been the increasing power of the Islamic
Revolutionary Guard Corps as a praetorian actor. This term can be traced back to the
Praetorian Guard, the ancient Roman military contingent that was primarily tasked
with the protection of the emperor, and was able to affect the imperial succession by
removing and installing emperors. The concept of praetorianism was developed in the
1960s by institutionalist scholars to elucidate the phenomenon of direct military intervention in politics and society. This literature pointed to important structural factors in
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Hen-Tov and Nathan Gonzalez came up with a more cautious estimate of being within the 25–40%
range. Hen-Tov and Gonzalez’s calculation drew on a rough summation of the revenue of the IRGC
companies and subsidiaries, estimates of illicit smuggling revenue based on trade discrepancies,
newly acquired assets in the recent wave of privatization, and control of parastatal assets though war
veterans. See Julian Borger and Robert Tait, “The Financial Power of the Revolutionary Guards,” The
Guardian, February 15, 2010, www.gu.com/world/2010/feb/15/financial-power-revolutionary-guard;
Elliot Hen-Tov and Nathan Gonzalez, “The Militarization of Post-Khomeini Iran: Praetotianism Praetorianism 2.0,” The Washington Quarterly, Vol. 34, No. 1 (2011), p. 58.
3. ““[ ”درباره ماAbout Us”], website of Khatam al-Anbiya, www.khatam.com/2552_ما-درباره.html.
ECONOMIC RISE OF THE IRGC ✭ 69
developing or already-established praetorian societies that witnessed frequent episodes
of military intervention in politics; namely, the absence of viable political institutions
and the failure of the government to manage political and socioeconomic matters. In
such societies, the military was the only institution that was able to dominate the state
due to its use of force and the weakness of political institutions.4 In the context of the
recent developments in the Islamic Republic, many observers have been influenced by
this insight in analyzing the IRGC’s rise in Iran’s domestic landscape.5 More recently,
Elliot Hen-Tov and Nathan Gonzalez classified Iran as a “post-praetorian state,” or a military-led political system featuring “the institutional transformation” of the IRGC from a
mere military organization into “a network of political and economic actors.”6 Similarly,
Roozbeh Safshekan and Farzan Sabet identified the IRGC as a praetorian actor that has
grown into a vast social, political, security, and economic force. Since the mid-2000s, the
IRGC has aligned with an emergent conservative coalition known as the Principlists (Osulgarayan), representing the political manifestation of this multilayered force that sought
to complete its political takeover of the state through electoral manipulation and coercion.
This new approach, Safshekan and Sabet argued, has closely resembled a traditional coup
d’état.7 The concept of praetorianism’s influence is also embedded in a work by Ali Alfoneh. Though not mentioning the concept directly, Alfoneh argued that the Revolutionary Guards’ rise to power has paved the way for transformation of the Islamic Republic
into a military dictatorship.8 As such, his characterization of the IRGC’s hegemonic takeover of Iran’s political regime strikes a chord with the praetorian frame of reference.
Despite its currency among observers of the Islamic Republic, a more in-depth
analysis of the theory of praetorianism shows that the concept is not useful for understanding the nature of civil-military relations in postrevolutionary Iran, where the
military’s involvement in politics has been more indirect, in sharp contrast to South
Asia, Latin America, and other parts of the Middle East.9 Two recent works in the scholarship look at the IRGC’s trajectory from a more nuanced perspective: that of Afshon
Ostovar and that of Bayram Sinkaya. Ostovar approached the subject of the IRGC’s
military power and ideology within the context of various internal developments of the
Islamic Republic and regional changes since September 11, 2001.10 Sinkaya looked at
4. Alfred C. Stepan, The Military in Politics: Changing Patterns in Brazil (Princeton, NJ: Princeton University Press, 1971), p. 62; Amos Perlmutter, Egypt: The Praetorian State (New Brunswick,
NJ: Transaction, 1974), pp. 4–15.
5. Hen-Tov and Gonzalez, “Militarization of Post-Khomeini Iran,” pp. 45–59; Roozbeh Safshekan
and Farzan Sabet, “The Ayatollah’s Praetorians: The Islamic Revolutionary Guard Corps and the 2009
Election Crisis,” The Middle East Journal, Vol. 64 (Autumn 2010), pp. 543–58; Kazem Alamdari,
“The Power Structure of Islamic Republic of Iran: Transition from Populism to Clientelism, and
Militarization of the Government,” Third World Quarterly, Vol. 26, No. 5 (2005), pp. 1,285–1,301.
6. Hen-Tov and Gonzalez, “Militarization of Post-Khomeini Iran,” p. 50.
7. Safshekan and Sabet, “Ayatollah’s Praetorians,” p. 544.
8. Ali Alfoneh, Iran Unveiled: How the Revolutionary Guards Is Turning Theocracy into Military
Dictatorship (Washington, DC: American Enterprise Institute Press, 2013).
9. On applicability of the concept of praetorianism to the Islamic Republic, see Hesam Forozan, The Military in Post-Revolutionary Iran: The Evolution and Roles of the Revolutionary Guards
(Abingdon, UK: Routledge, 2016), pp. 15–21.
10. Afshon Ostovar, Vanguard of the Imam: Religion, Politics, and Iran’s Revolutionary Guards
(Oxford: Oxford University Press, 2016).
70 ✭ MIDDLE EAST JOURNAL
the IRGC’s relationship with national political dynamics and elite configurations in the
Islamic Republic by developing a theoretical framework from civil-military relations in
revolutionary states.11 Like previous works informed by the theory of praetorianism, Ostovar and Sinkaya were each more concerned with the political role of the IRGC and failed
to provide a framework for understanding its growing economic and business-related role
within the larger context of the postrevolutionary state’s policies and capabilities.
This article seeks to fill this gap in the literature by providing an insight into the
history, complexity, and evolution of the IRGC within the domestic Iranian context. It
looks at this trajectory through the lens of factionalized competition and policy-making
that is unique to the Iranian authoritarian state and its relationship with society. We examine the dynamics and factors behind the IRGC’s growing role in Iran’s power politics
and national economy. To achieve this, we analyze the IRGC’s development through
history by drawing on the analytical framework found in the state-in-society approach.
Departing from state-centered conceptualizations, Joel Migdal, the pioneer of the statein-society framework, argued that states are rarely a centralized entity and that “they are
constrained in their autonomy as they govern and interact with society.”12 The reciprocal
interaction between the state and society determines states’ capabilities and their relative
strengths and weaknesses, with strong states being able to penetrate society, regulate
social relationships, extract resources, and effect its goals and agenda.13
According to Migdal, a careful survey of the state requires us to disaggregate the
state and examine its interactions with society at multiple levels. The state is comprised
of diffuse and conflicting set of institutions that come into contact with an array of
social organizations through accommodation and opposition.14 This process has unintended bearing on the capabilities of the state. To Migdal, the paradoxical phenomenon
that is common to the developing world, and the Middle East in particular, is that states
achieve a widening presence in society while being incapable of effecting a transformative agenda to regulate society and impose their wishes upon sizable arrays of the
population, namely local strongmen, social organizations, and social movements.15 At
the same time, the autonomy of these states and their capabilities are constrained by
the emerging centers of power within diffused state agencies and state-based interest
groups they have helped to create in order to extend their social control through mass
mobilization and coercion. Over time, state leaders’ reliance on such agencies, together
with the interests these agencies develop with society, turn them into giant centers of
power, virtually forming a state within a state.16 This evolution accompanies these organizations’ ambition to compete for further influence in the state in order to maximize
their resources and penetration into society.
11. Baryam Sinkaya, The Revolutionary Guards in Iranian Politics: Elites and Shifting Relations
(London: Routledge, 2015).
12. Mehran Kamrava, Understanding Comparative Politics: A Framework for Analysis (London:
Routledge, 2008), p. 45.
13. Joel S. Migdal, Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World (Princeton, NJ: Princeton University Press, 1988), pp. 3–9.
14. Joel S. Migdal, State in Society: Studying How States and Societies Transform and Constitute
One Another (Cambridge: Cambridge University Press, 2001), pp. 115–17.
15. Migdal, Strong Societies and Weak States, p. 9.
16. Migdal, Strong Societies and Weak States, pp. 207–10.
ECONOMIC RISE OF THE IRGC ✭ 71
In this article, we refine the state-in-society analysis in the following ways.
First, the state-in-society framework, as it used by its pioneer, deals extensively with
a case study of the state’s relationship with social structures (e.g. local strongmen
or tribesmen). Here, we employ the basic premise of this model to focus on a state
organization — Iran’s Islamic Revolutionary Guard Corps — as it interrelates with
the various state agencies, officials, and social forces over time. More specifically,
we examine the link between the IRGC (the institution proper, its networks, and
bases) and various components of the Iranian state (its elected and nonelected components, along with their personnel and state-based political and social networks),
on the one hand, and its interface with those social forces within “domestic society”
(clients, contractors, and voter blocs), on the other.17 Second, we give equal weight
to the state’s economic agenda and its political practices as an integral part of the
state-in-society approach. This point is dealt with only implicitly in Migdal’s work.
As Mehran Kamrava pointed out in his critique of the framework, “It is unclear …
whether such factors as political and/or economic performance play any role in shaping state-society relations.”18 In this article, we elaborate on this insight within our
state-society framework to evaluate the Iranian state’s economic agenda and ongoing
political processes: as the state and the IRGC interact with one another, on the one
hand, and the rest of society, on the other.
THE DEVELOPMENT OF THE IRGC
The Iranian Revolution of 1979, which toppled the Pahlavi monarchy, gave rise
to a hybrid authoritarian state consisting of a religious leader with his own appointed
clerical personnel in supervisory bodies such as the Guardian Council and the Expediency Council, alongside an elected president and parliament, the Majlis (in Persian:
Majles-e Showra-ye Eslami, the Islamic Consultative Assembly). The key feature of
this fragmented mixture of a state is its social contract, which is predicated on a contrived pluralism and an autochthonous brand of populism. Under the guidance of Ayatollah Ruhollah Khomeini, named Supreme Leader in late 1979, revolutionary leaders institutionalized limited and carefully controlled presidential and parliamentary
elections to secure their legitimacy, regulate politics, and avert potential conflicts in
society. While highly regulated, the interplay of such elections with a dual theocraticrepublican political system provided the basis for feisty debates and disagreements
among the regime’s competing clerical factions, which occupied the legislative and
executive branches of the government.19 Soon after eliminating their liberal rivals
(both secular and religious), Khomeini’s followers, who coalesced into the Islamic
Republican Party, began to splinter amid growing ideological differences in the early
1980s. From this split, two ideological blocs were born, which were commonly called
the Islamic Right and the Islamic Left. The former revolved around socially conservative and traditional clerical groups that staunchly supported theocratic rule, orthodox
Shi‘i Islamic jurisprudence, and Iran’s pre-industrial mode of mercantile capitalism.
17. Migdal, State in Society, p. 116.
18. Kamrava, Understanding Comparative Politics, p. 46.
19. Bahman Baktiari, Parliamentary Politics in Revolutionary Iran: The Institutionalization of
Factional Politics (Gainesville: University Press of Florida, 1996).
72 ✭ MIDDLE EAST JOURNAL
This bloc found support among conservative elements of the traditional bazari merchant class and the lower-middle class. After 1990 the Islamic Right began to control
the most powerful institutions. In contrast, the Islamic Left included a group of lay
and religious Khomeini loyalists that advocated revolutionary militancy and populist
economic policies based on nationalization.
In addition, the revolutionary state-society relationship also rested to a great
extent on populist mass mobilization and control. Like many populist states in Latin
America and the rest of the Middle East, the Islamic Republic created a set of institutions in order to enhance its reach over its core supporters among the lower classes,
who could be used against the regime’s opponents. In contrast to its counterparts, the
revolutionary state’s variant of populism had less to do with corporatism based on occupational interests.20 The Islamic Republic exercised its version of populism through
informal clientelist networks surrounding quasigovernmental organizati …
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