Economy Surrounded by Interests: Examining an Inefficient Structure
Economy Surrounded by Interests: Examining an Inefficient Structure
Amidst an economic structure that has long carried clear signs of systemic corruption, a recent report unveils another layer of instability and inefficiency in Iran’s regulatory mechanisms.
This report is prepared by Saeed Aganji, editor-in-chief of Irangate News Agency and an investigative journalist in the field of anti-corruption. The research, relying on field data, expert narratives, and structural analysis, explores the pathways of formation and persistence of corruption in Iran’s economy, providing a more precise picture of its hidden and overt cycles.
Systematic Corruption in Iran: The Power Mafia Amid Economic and Political Crisis
Introduction
In recent years, Iran has faced increasing economic pressures, foreign sanctions, and economic recession. However, alongside these issues, one of the country’s most significant structural challenges is systematic corruption within governmental and economic institutions.
This corruption is not sporadic but entrenched in various layers of power and governmental institutions, to the extent that many analysts speak of a power mafia among government officials.
This report, by examining international indices, major corruption examples, its mechanisms, and its consequences on society, provides a clearer image of the depth of this problem.
1. The State of Corruption in Iran Based on International Indices a. Transparency International’s CPI Ranking In the annual Corruption Perceptions Index (CPI) report, Iran has received a very low score. According to the 2023 report, Iran scored 25 out of 100, placing it 147th out of 180 countries.
In the 2024 CPI report, the situation worsened. Iran fell to 151st out of 180 countries, with a score of 23 out of 100. Such results indicate that perceived corruption in Iran’s public sector is very deep, and no significant improvement has been observed over the years.
b. Weakness in Corruption Control and Governance According to existing facts, the Corruption Control index, part of the World Bank’s Governance Index, shows a very weak status for Iran. In recent reports, Iran’s score in this index has been assessed as very low. Analysts believe this governance weakness questions the independence of oversight institutions and reduces the possibility of a real response to corruption.
2. Roots and Mechanisms of Systematic Corruption
To understand the depth of corruption in Iran, one must look at the mechanisms and structures that reproduce it. The rentier and quasi-military economic structure A large part of Iran’s economy is managed by governmental and quasi-military institutions. This allows for the accumulation of economic power in the hands of limited groups. Some analysts, including in independent reports, highlight the role of the Islamic Revolutionary Guard Corps in the country’s economy. In this structure, enterprises and companies under the influence of defense or governmental institutions, which have special access to economic resources, control a significant portion of government contracts, where the logic of rent prevails. Administrative and ethical corruption in management Recently, the head of the morality police confirmed that economic and ethical corruption has taken root among Iranian managers. This type of corruption includes abuse of managerial power, nepotistic appointments, and promotion of individuals due to political connections rather than merit. Embezzlement and misuse of public resources A clear example of systematic corruption can be seen in cases like the 2023 tea smuggling scandal. In this case, Debsh Tea Company was accused of extracting billions of dollars from the government’s subsidized budget, which analysts see as a sign of monopolized access to public resources among those close to power. Reports also indicate widespread corruption in Mobarakeh Steel Company. According to a parliamentary report, this company, partly under the control of the Revolutionary Guards, faces major embezzlement charges amounting to billions of tomans.
Limited Oversight, Judicial Immunity, and Suppression of Whistleblowers One of the serious obstacles in combating corruption is the limited independence of oversight and judicial institutions. Analysts say many high-level managers are immune from prosecution or punishment. On the other hand, whistleblowers and corruption exposers face the risk of arrest, threats, suppression, or punishment.
Consequences of Systematic Corruption on Iranian Society and Economy
Systematic corruption in Iran has profound impacts on people’s lives and the country’s future. Reduced Household Welfare According to economic analyses, improper resource distribution, embezzlement, and misappointments have led to reduced household welfare. A report from NCRI shows that corruption and mismanagement of resources are among the main factors in the reduction of people’s purchasing power, economic inequality, and capital flight. Public Distrust and Collapse of Trust in Government When corruption reaches a level where a large part of the populace sees it as systematic, public trust in governmental institutions decreases. This distrust can lead to political unrest, protests, and social uprisings. Structural Inequality Systematic corruption causes economic benefits to reach only a limited group, often close to power. This situation exacerbates inequality and reduces the possibility of healthy economic competition. Weakness of Democratic and Civil Institutions Examination of systematic corruption shows that civil, media, and oversight institutions in Iran have a limited role. Suppression of whistleblowers, journalists, and critics has practically reduced the possibility of public oversight of corruption.
Challenges and Prospects of Combating Corruption
Despite the vast dimensions of systematic corruption, combating it in Iran faces serious problems and limitations. Need for Institutional Independence One of the main prerequisites for effectively combating corruption is the establishment of independent oversight institutions with real executive power. Without this independence, any effort to combat corruption may merely be superficial. Financial Transparency and Access to Information Increasing transparency in government contracts, appointments, officials’ assets, and public budget implementation is key to reducing corruption. However, the publication of such information faces serious limitations in Iran. Support for Whistleblowers and Exposers Legal mechanisms to support those who expose corruption, whistleblowers, must be strengthened. Protecting them can lead to more disclosures and reduce hidden corruption. Economic Reforms To reduce the motivation for corruption, the rentier economy must be simplified, competition increased, and the involvement of governmental and quasi-military institutions reduced. This requires deep structural reforms in the country’s economic policy.
Conclusion
Corruption in Iran is no longer a minor phenomenon but has become systematically entrenched in the country’s political and economic structure.
From major economic embezzlements to ethical corruption at managerial levels, from limited oversight to judicial immunity, all these factors indicate the existence of a power mafia within the governmental body. International indices like CPI also confirm this situation.
To change this situation, not only political will but also institutional reforms, transparency, and support for civil society are needed. Without such changes, systematic corruption could become one of the main obstacles to Iran’s development and a serious threat to the country’s economic, social, and political future.