Columbia International Affairs Online: Working Papers

CIAO DATE: 12/2009

Iran's Oil Wealth: Treasure and Trouble for the Shah's Regime. An Assessment of Theoretical Approaches to the Impact of Resource Wealth – and an Argument for Considering the Context

Miriam Shabafrouz

November 2009

German Institute of Global and Area Studies


The Iranian revolution still appears to be a puzzle for theoretical approaches linking political instability and/or violent conflict to the resource wealth of a country. It therefore works well as a case study for the purposes of this paper: to show the necessity of a broader approach to the resource-violence link and to highlight the “context approach.” The focus is on the violence that accompanied the events preceding the revolution, and also on the fact that this violence was mainly exercised by the rulers and – excluding the activities of militant groups – only very randomly by the masses. Many relevant contextual conditions had an impact on the downfall of the shah’s regime: demographic (population growth, urbanization) and cultural factors (religious tradition, national identity); the vivid memory of several historical events; the personal preferences of central actors – mainly both the shahs – which in combination brought the country to an impasse; and the religious opposition to the regime. But upon closer examination, it becomes clear that many of those factors were influenced by resource specific conditions such as the amount and the use of oil income, sudden oil-price drops, and external interference aimed mainly at the domination of the oil sector. It was the specific interplay of these and other contextual conditions – as much resource‐specific as general, and both within the country and on an international scale – that finally brought about the downfall of the regime.