340 The American Journal of blamic Social Sciences Vol. 8, No. 2. 1991 

Book Review 

Revolution and Economic Transition: 

The Iranian Experience 

By Hooshang Amirahmadi. Albany, NY: State University of New York 

Press, 19<)(), 384pp. 

In this book, the author offers an empirical and theoretical analysis of 
the relationship between the Iranian Islamic revolution and the performance 
of the Iranian economy. The book in divided into three main chapters plus 
an introduction and a conclusion. 

In the introduction, the author gives a profound analysis of the prerevolu­
tionary period with a special emphasis on the Shah's open-door economic 
policies which led to rapid and uneven economic growth and eventually in­
creased Iran's economic dependence on the capitalist world. The author also 
analyzes the emerging political, cultural, and social ideologies in the Iranian 
society which set the stage for revolution. The proclaimed aims of the revolution 
were listed as achieving economic development, sovereignty, and justice. These 
were subsequently transformed into an Islamic vision as reflected in the con­
stitution and the first socioeconomic plan of the Islamic Republic. 

In the second chapter, the forces influencing the postrevolutionary economy 
are pointed out. The major force was the war which erupted with Iraq in 
the early 1980s. Apart from the destruction and loss of life, the war had 
an overwhelmingly negative and permanent impact on the economy. 



The American Journal of Islamic Social Sciences Vol. 8, No. 2, 1991 341 

The decline in world demand for oil in the 1980s and OPEC's policies 
caused a huge decline in oil revenues and further constrained the economy. 
The trade sanctions enforced by America and its allies in the wake of the 
hostage crisis made it extremely difficult for the Islamic Republic to do business 
in the international market. Its dependency on oil revenues and on external 
resources for domestic industry caused a severe underutilization of indigenous 
productive capability. The result was a sharp decline in both the national 
GDP growth and in its sectoral distribution. 

In the third chapter, the author focuses on the economic trends and prob- 
Iems faced by the economy. Apart from the decline in the GDP, the share 
of oil as a percentage of the GDP continued to decline. The author claims 
that the nationalization of the banking system and the introduction of interest- 
free banking (1985) bear a major responsibility for the failure of the banking 
system to contribute to the economy. The postrevolutionary economy was 
also characterized by huge budget deficits and high inflation rates. Although 
the war was considered the root cause of inflation, internal and external fac- 
tors also escalated it. The poorest members of the population were the ones 
who suffered the most from the absence of price controls and anti-inflationary 
measures. Unemployment was another major problem. 

Postwar reconstruction was the theme of chapter four. Here, the author 
considered reconstruction of the damaged areas and resettlement of displaced 
people as the major issues facing the Islamic Republic. He listed four major 
strategies for monstruction: a) stages of reconstruction, b) goals and priorities, 
c) role of the public and private sectors, and d) types of policies needing 
to be implemented. 

In conclusion, the empirical findings are listed as: the postrevolutionary 
economy is characterized by wide fluctuations and largely negative trends 
in production, investment, trade, employment, and regional development; 
many of the promised transformations have not been achieved; the economic 
recession that occurred during the war period continued to worsen even after 
the end of the war; absolute poverty has increased and per capita income 
has dropped; inflation and unemployment were and are still high and, most 
importantly, the postwar reconstmction remains in its initial steps. 

In preparing this book, the author has relied on his own collected data 
and information about the economy, research, interviews of insiders and policy 
makers, official announcements, manuscripts, and various sources of 
information. The author deserves credit for producing this valuable book. 

Abdel-Hamid Bashir 
Economics Department 
Grambling State University 
Grambling, Louisiana