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analysis of the tea and hand-woven carpet sectors also demonstrates that
the survival of these markets in the Tehran Bazaar is not related to the
amount of state regulation of commerce, but to the particular type of
state policies and the responses of bazaaris.
The analysis concludes by examining the political import of this change
in governance by linking the discussion of forms of governance to social

In Persian, ˜˜bazaar™™ refers to the city™s marketplace as a whole (e.g. the Tehran Bazaar,
Isfahan Bazaar, and Tabriz Bazaar), and is also used for the individual trades that make
up the bazaar. Therefore you can speak of the carpet bazaar, coppersmith bazaar, or
jewelry bazaar. To prevent confusion, I use ˜˜sector™™ to refer to individual crafts and
trades within the greater bazaar area.
Frank Fanselow, ˜˜The Bazaar Economy or How Bizarre Is the Bazaar Really?™™ Man 25
(June 1990), 250“65. On the issue of information and markets more generally see
George A. Akerlof, ˜˜The Market for ˜Lemons™: Quality Uncertainty and the Market
Mechanism,™™ Quarterly Journal of Economics 84 (August 1970), pp. 488“500; and
G. J. Stiglitz, ˜˜The Economics of Information and Knowledge,™™ in The Economics of
Information and Knowledge, ed. D. M. Lamberton (Harmondsworth: Penguin, 1971).
The puzzle of the Tehran Bazaar under two regimes 23

mobilization and asking why the Bazaar was better able to mobilize against
the state prior to the establishment of the Islamic Republic. I demonstrate
that the form of governance, and not ideological factors or the bazaar“
mosque coalition or purely individual interests and grievances, better
accounts for this shift from high to low mobilization capacity. The Tehran
Bazaar™s particular prerevolutionary forms of governance “ namely,
cooperative hierarchies “ were the critical factor facilitating its mobilization
and participation in contentious politics because these networks were
effective means to coordinate actions, disseminate information, mobilize
funds, and bring the disparate strata within and beyond the Bazaar toge-
ther. When the Pahlavi regime stepped in to directly restructure the Bazaar
in 1976, these functions were politicized and directed resources toward
mass politics. However, the shifting institutional setting and location of
networks that transformed the Bazaar structure after the Islamic Revolu-
tion also inhibited its potency. Thus, despite evidence that members of the
Tehran Bazaar have been dissatis¬ed with the Islamic Republic™s eco-
nomic policies and have recently supported the political reform move-
ment, they have not been able to translate their dissatisfaction into
mobilization against the state. The more fragmented and less socially
embedded networks that emerged in the 1980s and 1990s have limited the
Bazaar™s cohesiveness and capacity for collective action. In short, the study
proposes that macrostructural changes (i.e. the state™s developmental
approach and regime institutions) in¬‚uence microlevel quotidian politics
by altering network structures, which in turn shape the political capabilities
of social groups. The analysis of the Bazaar™s declining capacity to mobilize
against the state is a powerful means to indirectly infer and evaluate
arguments regarding the socioeconomy of the Bazaar. The extension of the
network approach to the Bazaar from the ¬eld of economic organization to
political mobilization, in addition, demonstrates its analytical scope.

Networks as causal mechanisms
Even this summary of the book™s main arguments illustrates that the
concept of embedded networks is the integral unit of analysis and the
underlying mechanism that grounds various aspects of my argument.
Those working with the New Economic Sociology paradigm have
developed theories of embedded networks arguing that economic action
is situated within regular sets of interactions that generate speci¬c
opportunities and constraints on action49 (see Chapter 2 for a more

Richard Swedberg and Mark Granovetter, eds., The Sociology of Economic Life (Boulder:
Westview Press, 1992).
24 Bazaar and State in Iran

complete discussion of this literature). Networks are the means by which
actors develop reputations, negotiate prices, evaluate information, resolve
con¬‚icts, and mobilize assets in all economies, but especially in settings
where information is sparse or asymmetric. Traders disseminate and
receive information about quality, price, and past performance to and
from members of the community through embedded networks, and not
via isolated bilateral exchange partners involved in strategic interactions
or normative notions of moral obligations and injustices. Thus, in this
account, embedded networks are relational mechanisms, or the unob-
servable devices that connect causal variables to outcomes.
I treat the Tehran Bazaar as a series of networks, rather than as a
cultural form, class, informal economy, or product of informational
scarcity. The Bazaar™s embedded networks are the devices that relate
actors to one another and in doing so are the means by which forms of
governance operate. I focus on ˜˜networks as a form of governance, as
social glue that binds individuals together into a coherent system.™™50 The
persistence of forms of governance and their characteristics such as group
solidarity or disunity are the result of, and not the cause for, the regen-
eration of ongoing ties.51 As Mark Granovetter has argued, ˜˜networks of
social relations penetrate irregularly and in different degrees,™™52 and thus
we must pay attention to variations and the evolution of these systems.
The empirical discussion focuses on the internal mechanism in this
regenerative process and the external factors in their disjuncture.
To make my argument more ¬ne-grained, and hopefully more com-
pelling, I investigate the in¬‚uence of structural and state forces by
endogenizing their impact on the Bazaar at the level of networks. Thus,
state and society-wide shifts are related to microlevel outcomes via
changes in the dimensions of networks (location and institutional setting
of networks). Finally, forms of governance, as conglomerations of net-
works, affect the capacity of bazaaris to acquire a sense of solidarity in
the face of internal differences and the Bazaar to mobilize resources
and coordinate actions in order to transform grievances into political

Walter W. Powell and Laurel Smith-Doerr, ˜˜Networks and Economic Life,™™ in The
Handbook of Economic Sociology, ed. Neil J. Smelser and Richard Swedberg (Princeton:
Princeton University Press, 1994), p. 369.
Podolyn and Page also use ˜˜form of governance™™ to differentiate network forms. See
Joel M. Podolyn and Karen L. Page, ˜˜Network Forms of Organization,™™ Annual Review
of Sociology 24 (1998), 57“76. Also, see Powell and Smith-Doerr, ˜˜Networks and
Economic Life,™™ pp. 369“70.
Mark Granovetter, ˜˜Economic Action and Social Structure: The Problem of
Embeddedness,™™ American Journal of Sociology 91(November 1985), 491.
The puzzle of the Tehran Bazaar under two regimes 25

Case design and method
The argument outlined above rests on empirical research primarily
conducted during two separate stays in Tehran, one from June 1999 to
August 1999 and the other from September 2000 to July 2001, as well
as several shorter subsequent visits. While the general research puzzle,
the case study, and time period were selected beforehand, the nature of
my topic precluded precise deductive theorizing; the arguments laid out
here are products of inductive analysis of the data collected.

Why the Tehran Bazaar?
The Tehran Bazaar is primarily a wholesale and import“export market-
place. In comparison with provincial and local bazaars, the Tehran
marketplace is involved in large-scale commerce, putting it more
immediately in contact with government agencies and making it directly
susceptible to changes in trade policies. The capital™s Bazaar, rather
than its smaller provincial counterparts, captures better the transfor-
mative powers of the central government™s in¬‚uence. Finally, for at least
four decades the Tehran Bazaar has consisted of at least 20,000 traders,
service workers, and employees from diverse ethnic, religious, and class
backgrounds. Thus, unlike village settings that enjoy the advantages of
small size and often cultural homogeneity, the bazaar in Tehran is a
highly complex case where one can investigate the creation, reproduc-
tion, and demise of community, collective action, and informal insti-
tutions under less restrictive parameters. Social scientists have studied
the conditions for the persistence and success of self-government,
communalism, and collective action in rural and homogeneous set-
tings,53 but attempts have not been made to extend these issues to more
complex sites, such as economies in large metropolitan settings.
Second, even though Tehran™s Bazaar does not enjoy the majestic
architectural quality of Istanbul™s or Isfahan™s grand bazaars, or the
historical legacy of its counterparts in Cairo or Aleppo, by virtue of its
numerous private trading companies distributing imported goods
throughout the country and consolidating goods for export, it boasts an
economic centrality unparalleled by other marketplaces in the region.
The Tehran marketplace combines import“export, wholesale, and retail

Elinor Ostrom, Governing the Commons (Cambridge: Cambridge University Press,
1990); Robert C. Ellickson, Order without Law: How Neighbors Settle Disputes
(Cambridge: Harvard University Press, 1991); Jean Ensminger, Making a Market:
The Institutional Transformation of an African Society (Cambridge, MA: Cambridge
University Press, 1992).
26 Bazaar and State in Iran

operations with large money-lending networks that provide credit to
members of the Tehran Bazaar, as well as private ¬rms in the manu-
facturing, construction, and service sectors located all over Iran.
Nevertheless, the Tehran Bazaar has not been commonly studied.
Empirical research focusing on bazaars is typically conducted by
anthropologists, geographers, and historians. Only rarely have sociolo-
gists and political scientists studied Middle Eastern central market-
places.54 Given anthropologists™ and geographers™ empirical focus on
studying more primitive and unadulterated native worlds, most studies
of Iranian bazaars have been conducted on bazaars in more provincial
and older cities, like the ones found in Kashan, Yazd, or Shiraz. His-
torians have paid less attention to the Tehran Bazaar, since it only
acquired its primacy after World War I. One of the main motivations for
my selecting the Tehran Bazaar is that despite its signi¬cant and central
position in Iran™s economy we have hardly begun to understand it.

Temporality: synchronic and diachronic analysis
Time is bifurcated in Iran. There is a ˜˜before™™ (qablan) and a ˜˜now™™
(alan or hala), with the future (ayandeh) being obscured by unpredict-
able machinations. A bewildering array of topics, including the price of
goods, stature of the religious establishment, population of cities, level
of air pollution, and quality of pastries, are commonly analyzed by
comparisons between ˜˜before™™ and ˜˜now.™™55 Popular commentaries
propose that changes are products of ideological, geopolitical, socio-
cultural, and macroeconomic forces, with many of my interlocutors
contradicting C. Wright Mills™s adage that ˜˜men do not usually de¬ne
the troubles they endure in terms of historical change and institutional
contradiction.™™56 Like many societies, older generations treat the
˜˜before™™ as a golden age and lament its permanent loss, while younger
Iranians, who often doubt the perfection of the past, seek to transform the
present and prefer to compare the current situation with ideals (and only
rarely Iran™s neighbors). The difference in Iran is that the transformation

A notable recent exception is Singerman, Avenues of Participation.
For an example from the Bazaar context see Asnaf no. 22 (Ordibehest 1373 [May
1994]), 38“40. Asnaf, the of¬cial magazine of the Association of Guild Affairs,
concluded that the economy has not worsened when one accounts for issues of equality
and dependence on external actors. It labeled the welfare of the Pahlavi era as ˜˜arti¬cial
welfare™™ (refah-e masnu˜ i) and ˜˜false welfare™™ (refah-e kazebi). Also, Asnaf ™s interviews
with members of various trade associations all begin with a question about the problems
and situation prior to the Revolution and after the Revolution.
C. Wright Mills, The Sociological Imagination (London: Oxford University Press, 1959),
p. 3.
The puzzle of the Tehran Bazaar under two regimes 27

between these two eras is marked by a well-de¬ned dislocation “ the
Islamic Revolution.
Researchers, nonetheless, have not followed this periodization in their
analyses of Iran. In its place, much ink has been spilt to debate the causes of
the Shah™s downfall, the political forces involved in bringing to power the
Islamic Republic, or the consequences of policies since 1979. Comparison
does enter these works, but it does so in order to evaluate the Iranian
Revolution in light of the experiences of other revolutionary episodes,
typically the French, Russian, and Nicaraguan cases.57 On the other hand,
we have few comparisons of Iranian society before and after the revolu-
tionary juncture.58 Social scientists in Iran have probably shied away from
this topic because of its political implications and their colleagues outside
Iran tend to eschew this approach because of inconsistent and incomplete
time series data, dif¬culties in conducting ¬eld research in Iran, and
generational and political divisions among Iran experts. By temporally
segmenting the historiography of modern Iran, scholars have subsumed
questions about process and rupture, or continuity and change.59
I have designed the project to isolate and interpret particular events,
processes, and suppositions about the Bazaar and its interactions with
the state by investigating the impact of the Revolution on the Bazaar. I
have speci¬cally framed my case study around historical comparisons,
believing that revolutionary upheavals are fruitful episodes for social
scienti¬c study since they serve as ˜˜natural™™ experiments wherein state“
society relations are radically altered.60

Misagh Parsa, States, Ideologies, and Social Revolutions: A Comparative Analysis of Iran,
Nicaragua, and the Philippines (Cambridge: Cambridge University Press, 2000); Farideh
Farhi, States and Urban-Based Revolutions: Iran and Nicaragua (Chicago: University of
Illinois Press, 1990); and Said Amir Arjomand, The Turban for the Crown: The Islamic
Revolution in Iran (New York: Oxford University Press, 1988).
Exceptions include Asef Bayat™s study of the plight of Iran™s urban poor, Ziba Mir-
Hosseini™s study of family courts, and Hooshang Amirahmadi™s study of the
macroeconomy. Bayat, Street Politics; Ziba Mir-Hosseini, Marriage on Trial: A Study
of Islamic Family Law (London: I. B. Taurus, 1993); and Hooshang Amirahmadi,
Revolution and Economic Transition: The Iranian Experience (Albany: State University of
New York, 1990).
It should be noted that continuity is emphasized by Marxist and more speci¬cally world
systems, approaches. Also, scholars in Iran, as well as reformist politicians, tend to
understand the persistence of authoritarianism, economic stagnation, and limited civil
society as a product of strong historical tendencies. Conversely, the of¬cial discourse of
the Islamic Republic accentuates discontinuities, while maintaining that shortcomings
(e.g. economic decline) are repercussions of the old order. Following the exact same
logic, but with different ends, monarchists interpret the two eras as completely
On strategies of periodization see Evan S. Lieberman, ˜˜Causal In¬‚uence in Historical
Institutional Analysis: A Speci¬cation of Periodization Strategies,™™ Comparative Political
Studies 34 (November 2001), 1011“35.
28 Bazaar and State in Iran

To understand historical trajectories we have two general and com-
plementary methods of study: one that is synchronic and is a compar-
ison at different historical moments, and another that is diachronic and
traces processes through time. In the ¬rst instance, a case (e.g. a state,
cultural practice, or economic form) is evaluated at two separate points
in time in order to identify and explain the structural changes. This
temporal comparison is in fact a synchronic analysis in the guise of a
diachronic approach, with each time period being treated as an isolated
and distinct case. (You may think of this as treating the case at t1 and t2
as distinct observations representing variations in the dependent vari-


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