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Iranian Economy: A "Mafia State"

Bloomberg Markets •
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Following the 1979 Iranian Revolution, leaders aimed for wealth redistribution and independence from Western influence. Decades later, Iran's economy has transformed into what Yeganeh Torbati and Bozorgmehr Sharafedin describe as a "mafia state." This system embeds loyalty to various factions within the country's political economy.

In their book, "Stolen Revolution: B," Torbati and Sharafedin detail how this structure impacts Iran's economic landscape. The revolution's initial goals have been overshadowed by a complex web of patronage and control, where personal connections and factional allegiance often dictate economic outcomes.

The "mafia state" model suggests that economic power is concentrated and wielded through informal networks and loyalty, rather than through transparent and formal institutions. This has led to a unique economic reality in Iran, distinct from its revolutionary aspirations.