This dissertation contains three essays on the political economy and economic development in Iran. In the first paper, I investigate the political resource curse. The comprehensive literature on the relationship between democracy and income counts oil-rich countries in Middle East as outliers: the abundance of funds for the states and the absence of effective tax systems hold back the formation of democracy. But democracy is more than a purely political system. Sustainable democracy requires a set of social norms and intra-citizen relationships that is called social capital. Emphasizing the importance of the formation of social capital on the democratization of a society, I use female labor force participation as a proxy for social capital. Using survival analysis, I show that oil revenue delays the formation of the social capital required for the democracy. In the second paper, I inspect the trend and patterns of group-based inequality in Iran. Inequality among groups can be a source of conflict and instability. Iran is a habitat of ethnic diversity and experiences stable peaceful relationships among its ethnicities, while its neighbors experience many ethnic conflicts. In this study, we compute three measures of group-based inequality for the following outcomes: education, assets, income, and expenditure per capita. The groups are defined based on gender, ethnicity/language (Persian, Azeri, and other ethnic minorities), and region (urban versus rural and capital city versus other places). The data are 23 years of annual Household Expenditure and Income Surveys (HEIS) from 1990 through 2012. Inequality between groups based on religion (Muslim, non-Muslim) and citizenship (Iranian, Non-Iranian) is also studied, using the 2006 census. The analysis of the trend of horizontal inequality reveals substantial reduction in between-group inequalities over the 1990–2012 period. On the other hand, gender based income inequality remains high. The implications and underlying reasons for these results are discussed. The third paper studies one the most serious recent problems facing Iran’s economy: the economic cost of the recent US and UN sanctions. This paper measures the economic cost of the U.N. trade and financial sanctions on Iran’s economy. While there is a substantial literature studying how sanctions impact the economies of target states, the aggregate economic cost of sanctions remains underexplored. This study provides a new measure of the cost of sanctions at the aggregate level, defined as the gap between Iran’s actual GDP and what it would have been without sanctions. Using the synthetic control method of analysis, I replicate Iran’s GDP without sanctions. I demonstrate that, while previous sanctions had a negligible impact, Iran’s GDP fell markedly following the financial sanctions of 2010. / PHD / This dissertation contains three essays on the political economy and economic development. The first paper studies the negative relationship between democracy and oil-income. Formation of democracy requires strong role of citizens in governing the society which is called social capital. I show that oil revenue delays the formation of the social capital, and therefore delays democratization. In the second paper, I inspect the trend and patterns of group-based inequality in Iran. Inequality among groups is counted as a source of conflict and instability. Iran is a habitat of ethnic diversity which experiences stability and almost peaceful relationships among its ethnicities, while its neighbors experience many ethnic conflicts. This study shows substantial reduction in between-group inequalities over the 1990–2012 period. On the other hand, gender based income inequality remains high. The third paper measures the economic cost of the U.N. trade and financial sanctions on Iran’s economy. I estimate the amount by which Iran’s GDP decreased following the financial sanctions of 2010.

In many conflict-ridden countries, food insecurity prevails. However, the relationship between food insecurity and armed conflict onset is a complex one, and scholarly attention has increasingly been directed towards furthering our understanding of its nature. In this study, the proposition is brought forth that the effect of food insecurity on armed conflict onset should be contingent on certain features of the economic, social and political environment. Specifically, it suggests that (i) food insecurity should increase the risk of armed conflict onset by generating deprivation in absolute terms, and (ii) that the risk should be heightened when such insecurity disproportionally affects certain groups in society. The latter point pertains to the level of horizontal inequality – i.e. inequality at the group level –, the presence of which is expected to compound the risk of food insecurity leading to armed conflict onset by adding a relative dimension of deprivation to the absolute. A logistic regression analysis is employed using global data for the years 1961 to 2009. The findings do not support the hypothesized relationship. Rather, although food insecurity does increase the risk of armed conflict in cases where the level of horizontal political inequality is low, it decreases the risk in cases where it is high. This indicates that the impact of food insecurity on the risk of armed conflict indeed is contingent on certain features of the political environment, which calls for conditionality to increasingly be taken into account in future research on the relationship between food insecurity and armed conflict onset.

Yemen is a conflict ridden country facing humanitarian issues as well as high levels of inequality, both due to the conflict itself but also the patriarchal hierarchy and customs that elevates men above women. The population of Yemen faces inequality in more than one way, however this study will be focusing on the recurring gender-based violence.  Gender-based violence is a widespread phenomenon and something that affects more than a third of women globally, whether it be through physical violence or more invisible forms such as emotional or financial abuse. This study will focus mainly on the physical abuse, including sexual violence in relation to the ongoing conflict, as well as harmful customs and practices that exists in Yemen. By using an intersectional framework and horizontal inequality the objective of this thesis is to examine how different social factors contribute to increasing gender-based violence. Moreover, this research aims to investigate the role of international organizations in relation to gender inequality and gender-based violence in a conflict ridden country, as well as potential initiatives done by the state of Yemen.  In conclusion, this study emphasizes how critical it is to adapt interventions to the specific obstacles suffered by women in conflict areas in order to assist with upcoming initiatives supporting women's empowerment and gender equality in Yemen and other similar circumstances. Additionally, this thesis concludes the importance of implementing both intersectionality and horizontal inequality as frameworks both on Yemen as a case study and on gender-based violence generally, as the issues are broad and fueled by many contributing factors. This is also what is missing from earlier research, broad and inclusive theories that can be applied to the specific case of gender-based violence in Yemen.

The relation between identity and Horizontal Inequality is increasingly relevant in the light of international migration flows. Research on the effects of Horizontal Inequality, or discrimination, on integration, is however limited. In particular, the causal mechanism underlying this relation remains to be defined. The present study fills this gap, arguing that perceived Horizontal Inequalities, i.e. inequalities between identity groups, create grievances in affected migrants that in turn increase group boundaries and, finally, decrease people’s ability to integrate into a new society. This proposed causal mechanism is tested through the use of process tracing and the controlled comparison method. Qualitative evaluative and thematic text analysis is employed to this end on novel micro-level data obtained through 30 interviews of concerned migrants and experts in Germany. The findings indicate support for the hypothesised model, amongst others highlighting the centrality of prior expectations and experiences for perceptions of Horizontal Inequality.

Region 5 is one of the most impoverished and insecure regions of Ethiopia. For decades, the region has suffered from a multitude of armed conflicts involving state and non-state actors. Region 5 is also one of the most underserved states of Ethiopia with some of the lowest levels of human development indicators nationwide. Although the adversities of poverty and conflict are widely acknowledged in their own respect, there has been little or no inquest into why poverty and conflict have prevailed under the same space for decades. Poverty and conflict have often been seen as separate phenomena that are dealt with using different sets of theories and practices in the real world. Nonetheless, a closer look at poverty and conflict in Region 5 reveals that both are strongly connected to each other. The poverty-conflict trap has been an on-going cycle in the region for the last five decades. The main intent of this research paper is analyzing the two-way relationship between poverty and conflict in Region 5. By studying this relationship, this analysis seeks to contribute to a new framework that brings peacebuilding and development closer.

Ethnic contentions would barely arise at the drop of a hat. To understand the roots of the Nagorno-Karabakh conflict, known as one of the most intractable ethnopolitical conflicts in the South Caucasus region, it is crucial to trace back to the Karabakh movement, a civic uprising that mobilized ethnic Armenians around a struggle for independence. What advantages would self-determination allow, that would not be achievable elsewise? To address this puzzle, I conducted a qualitative single-case study, designed as a deductive process-tracing, aimed at answering the research question why does political mass mobilization emerge (when it can possibly not)? Building upon relevant literature suggesting that horizontal inequalities lead to civil war, this research tests the following hypothesis: Perceived horizontal inequalities between coexisting ethnic groups are what underlie the emergence and evolvement of political mass mobilization. The comparative analysis of 11 in-depth interviews with Karabakh movement participants from Stepanakert and Yerevan, combined with an extensive investigation of over 120 secondary materials, suggests that, as was observed in the case explored, relative deprivation fed by experienced horizontal inequalities is what underlies the emergence of mass political movements, demonstrating strong explanatory potential within the theory on horizontal inequality.