The Economic Legacy of Mahmoud Ahmadinejad

Nader Habibi (nhabibi@brandeis.edu)

No 69, Working Papers from Brandeis University, Department of Economics and International Business School

Abstract: Mahmoud Ahmadinejad won the 2005 presidential election promising economic justice and fairness. Throughout his eight-year presidency, he paid more attention to economic fairness and redistribution of wealth than had previous presidents, and he adopted several populist financial and fiscal policies intended to fulfill his promise. These policies did reduce income inequality, but they also resulted in a loss of fiscal and monetary discipline. Yet, Ahmadinejad, a self-assured politician, often dismissed the warnings of both his critics and his supporters about the consequences of his economic policies. Ahmadinejad brought many commanders of the Revolutionary Guards and Basij militia into his cabinet and facilitated the sale of a large number of privatized firms to these institutions and their economic units. As a result, the Revolutionary Guards are now actively involved in all types of economic and financial activities in Iran. Initially, Ahmadinejad was skeptical of the market-oriented economic reforms of previous presidents, but he gradually changed his mind and continued many of them. His most important achievement in this regard was the reform of energy and fuel subsidies. With the active support of the Supreme Leader and the Revolutionary Guards, Ahmadinejad implemented the price subsidies reform in December 2010. Despite record high oil revenues, however, Iran’s economic growth during Ahmadinejad’s presidency was no better than in the Khatami or Rafsanjani eras.

Pages: 25 pages
Date: 2014-04
New Economics Papers: this item is included in nep-ara and nep-cwa
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