Chapter 8 examines the economic and fiscal dimensions of decentralization in the Islamic Republic of Iran. It presents a comprehensive empirical picture of fiscal decentralization and municipal finances under the IRI, which up till now has been a black box to Iran scholars. This chapter provides a look inside by describing the structure of subnational finance in Iran by analyzing a unique dataset I assembled covering the first phase of decentralization (1998–2006) covering almost 90 cities over an eight-year period – the result of the only comprehensive empirical study of municipal finances in Iran to date. This dataset provides a picture of the revenue and expenditure responsibilities of municipalities. The chapter explores the incentive structure of local government actors and the extent to which the political economy of fiscal decentralization in Iran supports or hinders the three projects for local government laid out throughout the book so far. It shows that local government’s lack of financial autonomy – explicitly constrained by tax, administrative, and local government laws – both distorts broad democratic participation and weakens the capacity of local governments to stimulate local economic development. The chapter highlights that the failure of the original decentralization reforms to put local economic development as a core priority has led to a failure in this regard, a major shortcoming of decentralization Iran to date.

Chapter 10 situates the findings of the book in the main lines of literature on Iran state-building: state centralization and its contradictions; authoritarian persistence; social welfare compact between state and citizens; and the challenges of democratization. The chapter also assesses the implications of the Iran experience for conventional expectations of the democracy-decentralization nexus. The chapter explains why the main lines of literature on modern Iranian state-building fail to explain what motivated the IRI to adopt political decentralization or to explain the timing when it finally did so. Nor does this scholarship distinguish the two dimensions of centralization emphasized in this book. Moreover, scholarship on Iranian state-building has thus far not engaged with the theory of electoral authoritarianism; my findings give strong support to this theory, which explains how the regime effectively deploys local electoral politics to enhance its dominance. Electoral authoritarianism moreover explains how the two forms of state power – the despotic and infrastructural – can be combined in the management of subnational divisions of the nation’s territory. Finally, the findings of the book undermine the claim, associated with writers such as Mahmoud Taleghani or Alexis de Tocqueville, that there is an necessary and causal relationship between decentralization and democratization. The book shows how political and electoral decentralization can be compatible with authoritarian state-building.

Chapter 9 reviews the attempt by Iranian local government to engage with the international municipal cooperation movement as a way to advance the goal of democratic local government inside Iran and highlights the geopolitical factors that pose sharp limits to that goal. For four years before Iranian security services terminated it, I was co-director of a pioneering “city diplomacy” project involving a multi-year collaboration between mayors and civil society groups from the Netherlands and Iran. The project included exchange visits between Iran and the Netherlands by city councilors, mayors, local civil society groups, and central government officials. It also included collaborative funded neighborhood projects inside Iran. The chapter traces the reasons for the failure of the city diplomacy project to geopolitical factors rooted in Iran’s rejectionist foreign policy and anti-Western and anti-liberal ideology. The international geopolitical factors compounded the antidemocratic ideological commitments of the regime that defeated domestic attempts at reform. Despite its abrupt curtailment, the four-year project made some valuable contributions to the discourse/project/ideal of local democracy in Iran, although its impact on the practice of local democracy is not clear. On the other hand, the Iranian state resolutely moved into the space of international municipal cooperation work in a way that negates and neutralizes democratization and imposed its own terms of Islamization on the interchange with the international community around the theme of urbanization and cities. This shows that the Iranian regime is extremely skilled at managing risk rather than eliminating it.

After the war with Iraq (1980–1988), Iran had to reconstruct the economy and the government’s public management systems to address mounting challenges of urban poverty, low economic growth, and poor local management, which had led to significant urban unrest in several cities. The technocratic response of the Rafsanjani administration (1989–1997) included tentative steps to decentralize some central government functions to municipalities and a mandate for them to become financially self-sufficient. The technocrats supported decentralization for instrumental or pragmatic reasons of increasing the efficiency of local administration, not for empowering local democracy. I interpret the tensions between the competing imperatives of the Iranian decision to decentralize by distinguishing two ways a state can be strong, or between what I call good and bad centralization. In so doing, I draw on the distinction of two types of power introduced by Michael Mann, “infrastructural” power – the power of states to achieve collective purposes – and “despotic” power – the capacity of government to exert power over society and individuals. While both authoritarian and democratic states seek to augment the former, authoritarian states depend on strengthening the latter. By their indifference to the goal of checking despotic power, the technocratic endorsement of decentralization worked against democratization and dovetailed with the velayi goal of augmenting both forms of power together toward the goal of Islamizing society and state. At the same time, the failure to promote local economic development through decentralization must be considered a failure of the technocratic agenda.

Control over the management of urban land use is one the local government powers with the greatest influence on the lives of residents (the other being the budget). Yet in Iran, despite political decentralization, the responsibility for land use rests with the central government and the relevant local branches of the relevant ministries. Chapter 7 reviews the history and legal framework of master planning as well as the economic pressures that led governments to ignore their municipalities’ master plans during the 1990s. The chapter describes how a controversial urban renewal project in the early 1990s led to calls for greater local participation in the development and design of plans by the new elected council. It then examines the effort to give the municipality a greater and indeed determinative role in city planning and land use management during the preparation of the third Tehran Master Plan 2003–2007. A success in the capital city would have created a precedent and model for many other cities. While national media brought the issue to public attention and local representatives had unprecedented involvement in city planning, ultimately the city council failed to achieved more than an informal role with formal responsibility remaining with the central government. The chapter concludes by highlighting the great difficulties and challenges of achieving greater local participation in complex and technical areas of local governance such as land use planning.

The reformist project of local democracy that found practical expression in the first elections of 1999 took place against the backdrop of what the scholar Merilee Grindle called the period of “decentralization revolution” that swept across many countries of the world starting in the 1980s. The decentralization reforms in Indonesia and China, the former embracing political decentralization and the latter rejecting local elections and focusing only on fiscal and administrative decentralization, are briefly discussed as a point of comparison with Iranian case. The reformists motivations to pursue democratization were primarily rooted in the conviction in the unfinished project of democratic and pluralistic republicanism of the 1906 Constitutional Revolution in Iran (Mashruteh). The chapter clarifies the theoretical definitions of democracy and authoritarianism, vital background for understanding the story of political decentralization in Iran. Particularly important is the concept of “civil society” which was the animating concept for the reformists’ advocacy of elected local government (shura) as an embryonic democratic civil society institution. However, the reformists’ strategy was flawed in two respects. They failed to adequately grasp the contradictions inherent in the dual nature of local government as simultaneously part of civil society but also a branch of the governmental bureaucracy. At a time when many worldwide hoped decentralization would promote democratization in places like China and Iran, the reformists also underestimated the ability of their velayi opponents to employ decentralization to their own ends.

Chapter 6 first examines contention over the scope of local political representation. Covering the six rounds of city council elections from the first in 1999 to the sixth in 2021, the chapter shows how candidates and parties have been prevented from participating in city council elections through formal and informal processes of disqualification. It also shows how central government supervision and national administrative law constrains the range of local legislation the city councils can pass. I also show that the intergovernmental system is highly regulated and that central government-appointed representatives have broad power over elected officials at the province, district, city, and village level. This chapter concludes by pointing to the mixed legacy of the local electoral and political system created in 1999. On the one hand, central government bureaucracy and national-level laws blocked municipal governments from passing local legislation on most issues or raise the revenue necessary for fulfilling their legal mandates. For example, the first Tehran City Council failed to pass a Tehran Municipal Charter enshrining greater democratic rights for local civil society and autonomy vis-á-vis central government. On the other hand, elected local government became institutionalized as a coherent but subordinate component of the Islamic state. Within these narrow limits, thousands of creative and dedicated municipal councilors and employees did their best to represent their local constituencies and manage their cities.

This chapter argues that rather than a unilinear extension of the market project from England to France, the Anglo-French contestation, and the concomitant processes of uneven and combined development during the early modern period sharpened and restructured existing sociohistorical differences, ultimately leading to the formulation of a qualitatively different regime of property and modernization in France. Jacobinism was neither absolutism nor capitalism, but combined and bypassed both based on a new form of sociality and political economy. It produced novel social, economic and geopolitical dynamics that gave modernity a radically multilinear texture.

This chapter will depart from these interpretations of the Turkish Revolution through the theoretical and historical pointers discussed in previous chapters. It will argue that the original Kemalist experiment with modernity (1923–45) cannot be understood as a form of (state) capitalism, but rather as a historically specific Jacobinism.

Having documented the uneven and combined developmental trajectories of Britain and France, in this chapter I will begin to explore the significance of Jacobinism for our understanding of the rise of multiple modernities outside Western Europe. To this end, I seek to identify the precise nature and concrete outcome of the "combined" character of Ottoman modernization. It shows that the late Ottoman Empire can neither be understood as a "patrimonial state" nor can it be conceptualized as a "peripheral capitalism." Instead, the end result of the Ottoman experiment with modernity was a historically specific Jacobinism that combined and bypassed capitalism (and socialism) based on an alternative form of property and sociality.