In this dissertation, I investigate the role of oil resources and economic and political institutional quality on the economic performance of Iran. To this end, I examine four related themes. First and foremost, I provide a detailed picture of the economic structure of Iran and compare its performance with other oil and non-oil economies of the Middle East and the Middle Easterb region. As we get a clear picture of the relative economic position of Iran in the MENA region, I go further into macroeconomic analyses of oil wealth effects on the Iranian economy. The second theme investigated in this dissertation is the interaction of political power structure with oil rents and their effects on Iranian economic growth. This study is the first examination which takes into consideration political factionalism interaction with oil rents in the case of Iran. The results show that oil resources have a direct positive effect on economic growth in Iran. However, the interaction effect of factionalism (as a proxy for political asymmetry degree) with oil rents is negative and significant. The third theme which is examined in this study is illegal trade in Iran. This topic is also related to natural resource management in Iran. A large number of fuel products smuggled from Iran are due to heavy subsidies within the country. In this study, I measure the amount of illegal trade in Iran, identifying the major causes and indicators of smuggling. The average of illegal trade in Iran’s total trade is 13%. The value of annual illegal trade, on average, is within the range of $ 2.5 - 3 billion. The fourth topic which is examined in this dissertation is macroeconomic populism in Iran. The main source of financing populism spending in Iran is the oil revenues. Therefore, it is connected to the management of natural resources.




Political Economy, Iran, Oil, Energy, Governance, Illegal Trade, Smuggling, Populism