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! The$Rise$Of$Iran$Auto ! The$Rise$of$Iran$Auto:$Globalization,$liberalization$and$network:centered$development$in$ the$Islamic$Republic$ $ By$ $ Darius$Bozorg$Mehri$ $ A$dissertation$submitted$in$partial$satisfaction$of$the$ requirements$for$the$degree$of$ Doctor$of$Philosophy$ in$ Sociology$ in$the$ Graduate$Division$ of$the$ University$of$California,$Berkeley$ Committee$in$Charge:$ Professor$Peter$B.$Evans,$Chair$ Professor$Neil$D.$Fligstein$ Professor$Heather$A.$Haveman$ Professor$Robert$E.$Cole$ Professor$Taghi$Azadarmarki$ Spring$2015$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1$ Abstract$ The$Rise$of$Iran$Auto:$Globalization,$liberalization$and$network:centered$development$in$ the$Islamic$Republic$ by$Darius$Bozorg$Mehri$ Doctor$of$Philosophy$in$Sociology$ University$of$California,$Berkeley$ Peter$B.$Evans,$Chair $ 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$ $ 2$ 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.$ $ i$ ! Table!of!Contents! Introduction ...........................................................................................................................................1$ State!of!the!Literature....................................................................................................................................3$ The$Global$Reconfiguration$of$Industrial$Production .....................................................................................3$ Developmental$and$Neo:Developmental$State$Theory...................................................................................5$ The$Causal$Mechanisms$behind$the$Formation$of$State$Capacity:$Social$Fields$and$Institutional$ Theory ..................................................................................................................................................................................8$ The!Case!of!Iran!Auto.................................................................................................................................. 10$ Conditions$for$Automobile$Industrial$Development.....................................................................................13$ The!Puzzle!of!Iran!Auto.............................................................................................................................. 14$ Where$Did$the$Required$State$Capacity$Come$From?..................................................................................14$ Where$Did$the$Required$Technical$Capacity$Come$From?.........................................................................18$ Chapter!Summaries..................................................................................................................................... 19$ Chapter!1!A!Setting!the!Stage:!The!preArevolution!rise!and!the!postArevolution!decline! of!the!automobile!industry............................................................................................................. 22$ Introduction................................................................................................................................................... 22$ From!Incoherent!Development!to!State!Autonomy.......................................................................... 23$ The!Founding!of!the!Automobile!Industry .......................................................................................... 24$ Pushing!the!Envelope!of!Industrialization:!Streamlining!State!Organizations!and! Importing!a!QuasiAState!Development!Organizational!Form!from!Italy................................... 25$ The!Organization!of!Development ......................................................................................................... 27$ Automobile!Industrial!Performance,!1969–1979............................................................................. 30$ The!Revolution!Years!and!Incoherent!Automobile!Industrial!Development,!1979–1990 . 32$ The!Organization!of!the!State!and!the!Development!Project........................................................ 34$ The!Radicals!and!the!Depletion!of!State!Capacity............................................................................. 35$ Automobile!Industrial!Performance,!1979–1989............................................................................. 37$ Summary ......................................................................................................................................................... 38$ Chapter!2!A!The!Rise!of!the!Industrial!Nationalists:!Postwar!conflict,!neoliberalism,! and!national!industrial!strategy................................................................................................... 40$ Introduction................................................................................................................................................... 40$ The!Political!Field!in!Iran.......................................................................................................................... 42$ Restructuring!the!Political!Field:!The!rise!of!Rafsanjani,!1988–1989 ....................................... 45$ Restructuring$of$the$Executive$Branch ...............................................................................................................46$ Institutional$Restructuring$and$Legitimizing$of$Industrial$Development...........................................47$ Rebuilding$State$Capacity:$The$Technocrats$and$Development$Bureaucracies ...............................49$ Industrial!Nationalists!Make!a!Move!toward!SelfAReliance........................................................... 51$ The$Left$Fights$the$Left:$Industrialists$vs.$Agriculturalists,$1989—1990............................................52$ Industrialists$vs.$Neoliberals$and$the$Rise$of$Infant$Industry$Protection,$1990–1992..................56$ Achieving!Nationalist!Aspirations!through!Automobile!Industrial!Development:!The! ideological!position!and!policies!of!the!industrial!natioanlists ................................................... 59$ Comparing!Rafsanjani’s!“Modern!Right”!Faction!and!the!Industrial!Nationalists................. 63$ Summary ......................................................................................................................................................... 66$ Chapter!3!A!An!Era!of!Coherence:!StateAled!development!and!the!deepening!of! automobile!industry!ties!to!society ............................................................................................. 67$ $ ii$ The!Organization!of!the!State!and!Its!Role!in!Automobile!Development.................................. 68$ An!Era!of!Coherence:!StateALed!Development!and!the!Deepening!of!Industry!
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