As sociologists argue, the privatization of state-owned enterprises in developing countries has been a key arena of corruption and political exchange. Economists usually predict a benign outcome before the fact, but studies of Eastern Europe by Ivan Szelenyi and David Stark show how bureaucratic power in state administrations converts into economic power during economic transition. Given recent shifts in the region, Middle Eastern countries present a new site for testing and developing theories of corruption and the transformation of social status during rapid privatization. In Iran's case, the government agreed in 2015 to limit domestic enrichment of nuclear material in exchange for the elimination of international strictures on investment and financial flows into the country. With investors now able to return to the country, Iran's administration under President Hassan Rouhani undertook a transparency campaign to make financial information available on major domestic companies. Building from recent research on Egypt, Turkey, Lebanon, and Pakistan, this paper utilizes newly available government and corporate sources by drawing from a novel database of financial and sociological information on Iran's top 250 companies across 22 sectors.
I ask two questions in the paper. First, how has the ownership structure of Iran's largest 250 firms changed over the past five years (2012-16), including acquisitions of shares in public companies by domestic pension funds, military and religious foundations, private domestic actors, and foreign direct investment from Europe and Asia? Second, what are the sociological backgrounds of Iran's corporate managerial class, and how does variation in managers' backgrounds differ across economic sectors? Overall, the paper assesses patterns as ownership and managerial control moves from public hands into more opaque, semi-state and grey market zones in order to compare with previous experiences of public sector liberalization in the Middle East, Latin America, East Asia, and Eastern Europe.
