Royal Developmentalism: Oil Disruptions and Socioeconomic Reforms in Iran and Saudi Arabia,1953–79

Abstract

Between 1953 and 1979, oil disruptions – the socioeconomic dislocations caused by petroleum wealth, from inflation and inequality to labor market transformation – reshaped the political economies of Iran and Saudi Arabia, driving both monarchies toward ‘royal developmentalism’, a form of authoritarian modernization. Despite their significant cultural differences, the two states followed similar paths in responding to oil-induced economic challenges, internal elite tensions, and revolutionary pressures across the region. This comparative analysis highlights how popular demands and regional dynamics, rather than autonomous state decisions or external impositions, shaped reforms such as Iran's White Revolution and Saudi Arabia's Ten-Point Program. Royal developmentalism has emerged as a strategy for monarchs to maintain political stability through ambitious socioeconomic initiatives that promise improved living conditions and greater equity. However, oil wealth also created new vulnerabilities: rapid modernization deepened inequalities, caused social contradictions, and fueled political unrest, eventually contributing to the 1979 Iranian Revolution and simultaneous uprisings in Saudi Arabia. These examples demonstrate that oil revenues alone do not ensure authoritarian stability, but rather catalyze complex interactions between states and societies, marked by escalating expectations and negotiations. This study explores how oil disruptions, regional competition, and internal conflicts influence state development strategies and offers insights into the contemporary challenges faced by oil-rich nations transitioning to post-oil economies.

Since 1953, oil-related disruptions fundamentally transformed the political economies of Iran and Saudi Arabia, setting both monarchies on parallel paths of ambitious developmentalism. While oil revenues promised prosperity, they also generated profound socioeconomic discontent. Oil disruptions further compounded stress on ruling elites. In Iran, the overthrow of Mohammad Mossadegh cast a lasting shadow over the Shah's legitimacy. ¹ In Saudi Arabia, King ′Abd al-′Aziz's death triggered a protracted power struggle among his sons. These internal power struggles drove elites in both states to search for broader social coalitions to stabilize their political systems. Thus, oil wealth created both opportunities and vulnerabilities for these monarchies.

This article examines how such oil disruptions drove ‘royal developmentalism’ – a new form of authoritarian modernization in which monarchs adopted popular socioeconomic reforms to maintain political stability. It argues that, despite their apparent differences, Iran and Saudi Arabia followed strikingly parallel trajectories in response to oil disruptions. Scholars have typically treated these cases separately, viewing the civilizational differences between Shi′a Persian Iran and Sunni Arab Saudi Arabia as precluding meaningful comparison. Yet, examining them together illuminates remarkable similarities in how oil wealth transformed state-society relations. While Iran pursued secular modernization and Saudi Arabia framed its reforms in Islamic terms, both royal developmentalist programs emerged as preemptive strategies, whereby rulers promised rapid improvements in living standards and greater social equity in exchange for political acquiescence.

The analysis of royal developmentalism challenges two dominant theoretical approaches to understanding development in oil-rich monarchies. First, it moves beyond what Cyrus Schayegh has criticized as ‘methodological statism’ – the tendency to view reforms as autonomous state actions initiated by enlightened or calculating rulers. ² This state-centered perspective, often reinforced by regime propaganda and official historiography, portrays development as a product of royal vision and benevolence. The Shah's account of the White Revolution as his personal initiative, or Saudi narratives crediting King Faisal alone with modernization, exemplify this top-down framing. ³ Such accounts obscure the crucial role of popular demand in driving reform.

Second, this analysis complicates rentier state theory, which emerged during this period to explain how oil revenues shaped political development. ⁴ The rentier framework emphasizes how external rents accruing directly to state treasuries enable rulers to purchase political compliance through distribution rather than through extraction. Citizens become clients who receive state largesse rather than taxpayers who demand representation. This theory captures important dynamics but obscures others. While oil revenues certainly expanded state capacity for both coercion and co-optation, they also generated new forms of socioeconomic disruption that created political vulnerability. For example, the uneven distribution of oil wealth highlighted inequality rather than hiding it. Oil-funded development projects created new social actors with new grievances and aspirations. Indeed, the process of distributing rents through development programs politicized questions of who received what and why.

Royal developmentalism thus represents not autonomous state action enabled by rents, but rather constrained responses to oil-generated social pressures that rulers could neither fully control nor ignore. This reveals a more complex trajectory, where state-building occurs through continuous, albeit implicit, negotiations between the rulers and the ruled. The Iranian and Saudi cases demonstrate that oil wealth does not automatically translate into stable authoritarian rule; instead, it initiates dynamic processes of social mobilization and state response that can undermine the foundations of monarchical power. This challenges deterministic accounts that assume oil wealth simply strengthens autocracy, showing how petroleum resources create not only fiscal capacities but also social forces that reshape state institutions from below.

This article traces the evolution of royal developmentalism through three critical phases in the relationship between oil disruptions and political responses. The opening analysis examines how 1953 initiated a new era of oil-driven change in both states, analyzing how the disruptions caused by petroleum wealth reconfigured political authority, intensified elite and social pressures, and created new expectations for development and redistribution within the broader context of Cold War rivalries and regional ideological competition. The subsequent discussion provides a close analysis of the Ten-Point and Twelve-Point Programs for development in Saudi Arabia and Iran, respectively, examining them as royal developmentalist responses to these pressures and demonstrating how specific provisions addressed particular grievances while attempting to build new bases of regime support. The final part explores how the 1973 oil boom accelerated development in ways that created greater inequalities and anxieties, ultimately culminating in the 1979 crises: the revolution in Iran and armed uprisings in Saudi Arabia.

In 1953, both Iran and Saudi Arabia experienced major political turning points that reshaped their trajectories for decades. In Iran, the overthrow of Prime Minister Mosaddegh enabled the Shah to reassert control and pursue centralized rule. In Saudi Arabia, King ′Abd al-′Aziz's death sparked a prolonged succession struggle between his sons, Saud and Faisal, accompanied by efforts to centralize state authority. These shifts occurred amid the exponential growth of oil revenues, mounting domestic pressure, Cold War rivalries, and the growing appeal of Arab Socialism and nationalism.

Between the 1950s and the 1960s, the surge in petroleum wealth fundamentally altered the political landscapes of both countries. Oil revenues flowing directly into state treasuries under royal control created new dynamics of power, as rulers faced unprecedented challenges in managing elite expectations for revenue sharing while responding to broader social demands for redistribution. The influx of petroleum wealth not only created socioeconomic disruptions requiring intervention beyond traditional economic reforms but also transformed the very nature of political authority itself.

This concentration of oil revenues in royal hands changed the existing power structures. As competing elites vied for their share of petroleum wealth, rulers recognized the need to build broader social coalitions to outmaneuver rivals and ensure their survival. Together, these forces reconfigured the foundations of political authority and economic governance, ultimately paving the way for ambitious reform programs launched by both monarchies in the early 1960s.

Oil revenues transformed the economies of Iran and Saudi Arabia, creating a cascade of unintended consequences. As petroleum income grew, local agriculture withered and was unable to compete with the flood of imports, which rose in direct correlation with oil wealth. Rural-to-urban migration accelerated along with these changes. Both regimes responded with intertwined agricultural and land reforms, ostensibly to modernize cultivation and deliver social justice to rural populations. Yet, these reforms aimed to address more than centuries-old deprivations or backward farming methods – they were designed to remedy the very disruptions caused by oil wealth: the hollowing out of traditional agriculture, mounting social dislocations, and the relentless flow of migrants to cities.

Another example of reforms resulting from socioeconomic pressure was industrialization aimed at reducing dependency on imports, which constituted considerable hardship for manufacturing in urban regions. State efforts at industrialization then and later sought to offset this reality by transforming local production to make it more competitive. During this period, agricultural and land reforms, industrialization efforts, and infrastructure development became increasingly central to royal developmentalism, even before the grand-scale state programs of the early 1960s (see below).

Labor relations in oil fields further exposed the socioeconomic ambiguity of oil riches. The regional oil industry attracted local, regional, and international workers seeking employment, prompting significant protests over working conditions, remuneration, and racial hierarchies that privileged expatriates over locals. ⁵ In Iran, the recent overthrow of Prime Minister Muhammad Mossadegh, who had nationalized the oil industry, cast a lasting shadow over the Shah's legitimacy. Saudi Arabia's oil fields witnessed similar labor protests that initially helped bring Mossadegh to power. ⁶ In both countries, struggles over working conditions merged with resentment toward foreign industry domination. The oil sector facilitated the emergence of a modern working class capable of organizing politically, while labor conditions in the oil fields set new employment benchmarks that catalyzed struggles in other economic sectors.

Economic modernization contributed to the rise of a new, educated middle class required for its technical and bureaucratic expertise, which would also raise popular protests and act upon them. Overall, economic growth increased the number of the old middle class, often engaged in commerce, but also brought about some convergence between the old and new middle classes, for example, through sons of merchants receiving modern education. State-building and centralization further contributed to the emergence of an educated and often state-employed middle class. ⁷ Here, too, the latter was central in establishing state institutions while promoting a new vision of development from which it had much to gain. It further lobbied the state to introduce such modernization measures.

Fast-growing cities became the epicenter of oil-induced disruptions. Rural migrants swelled urban populations, intensifying poverty while throwing stark inequalities into sharp relief. Oil revenues drove these problems further through ‘Dutch Disease’ effects – soaring real estate prices and inflation that eroded purchasing power, even as the overall economy grew. ⁸ These disruptions coincided with the emergence of mass consumption patterns. ⁹ Urban citizens, now conscious of their role as consumers, demanded more than just poverty relief. They expected state protection from inflation and tangible improvements in their standard of living – expectations fueled by the visible wealth that oil had generated in their countries.

Oil disruptions impacted the Iranian and Saudi elites and triggered significant power struggles amid the rapid state-building and economic development that oil riches brought.

In Saudi Arabia, an earlier system of informal subventions to maintain tribal support was being replaced, not least because subventions were to no avail during a period when tribal labor migration spread. The Saudi government was centralized in Riyadh and underwent a process of institutional building, with state ministries becoming central to new inter-elite settlements and patronage. ¹⁰ In Iran, the Shah's struggle for greater autonomy from the political elite – to bolster his regime – would benefit from new forms of economic patronage. ¹¹ However, elite competition over state positions threatened political stability, forcing rulers to ever-accelerate the state-building process and economic development to allow for more such appointments and opportunities.

The bureaucracy and military – the two other central pillars of both regimes – were further built to ensure political stability, while increasing elite rivalry. ¹² Large expenditures on both constrained socioeconomic development, which could ease social protests. Furthermore, the rapid numerical and financial expansion of the state contributed to growing opposition to the mismanagement of funds and corruption. Indeed, many of the future reforms in both states would involve attempts to resolve these hardships, which led to economic crises in Saudi Arabia (1958) and Iran (1960). These crises, in turn, contributed to growing political unrest and increased demands for reform, soon to be embodied in development programs in both states.

These domestic pressures were increasingly compounded by regional and international dynamics. The republican-revolutionary wave of the 1950s and the early 1960s created a demonstration effect that profoundly influenced royal responses in Saudi Arabia and Iran. In an era of decolonial promise, states needed to forge new social contracts promising ever-expanding benefits to citizens. Faisal's and Muhammad Reza Shah's reforms were remarkably similar in scope and scale to the republican national-populist schemes. ¹³ Nasser's Egypt emerged as both an ideological challenger and a developmental model whose programs – including the Aswan High Dam, land reforms, and free education – established regional benchmarks that monarchies could not ignore. Nasser created a standard against which all governments were measured, ultimately driving a convergence between republican and monarchical development plans. ¹⁴ In Iran and Saudi Arabia, regional socioeconomic reforms or revolutions from above, often coming from among the military and the bureaucracy who seized power and directed them against the previous ruling elite turned preemptive – defending monarchical regimes against such moves. ¹⁵

The revolutionary year of 1958 brought a particular urgency: the formation of the Egyptian-Syrian United Arab Republic showcased Arab nationalism and republicanism, while ′Abd al-Karim Qasim's coup in Iraq overthrew the Hashemite monarchy, positioning a revolutionary republic dangerously close to both Riyadh and Tehran. ¹⁶ The revolution in Iraq also drew Iran and Saudi Arabia closer under growing American influence, which further pushed both states to reform (see below). ¹⁷ Royal developmentalism thus emerged within the context of regional competition, where monarchies needed to demonstrate that they could deliver progress as effectively as revolutionary republics.

In Saudi Arabia, Ba′thism and Nasserism further gained traction in the oil fields. Transistor radios broadcasted revolutionary messages from Cairo, and Egyptian teachers working within the Saudi education system further spread such messages. ¹⁸ Underground movements such as the National Liberation Front and the Union of the People of the Arabian Peninsula explicitly modeled themselves after successful regional revolutionary organizations. ¹⁹ Consequently, Faisal's 1962 Ten-Point Program closely interacted with Nasser's National Charter during a period of political tension between the two states, resulting in a proxy war in Yemen. ²⁰ The Ten-Point Program, as expressed by Faisal, was a reaction to Arab socialism, but in many respects, it was a mirror image of the pledges that the National Charter carried, especially concerning the development of social services for citizens. This mirroring was not coincidental but reflected the competitive dynamics of regional developmentalism.

By the late 1950s, the Shah bolstered his power, but the legacy of the communist Tudeh party and the National Front, which initially supported Mossadegh, still carried weight in the growing protests that followed the economic crisis. ²¹ Such opposition articulated alternative socioeconomic and political visions for oil-induced transformation, responding to the new challenges and opportunities of the oil age, and visions that the Shah could not simply ignore.

During the Cold War, Iran and Saudi Arabia served as key allies and clients of the United States, forming crucial pillars of American strategy in the Middle East. The United States relied on these partnerships to counter the potential alignment of regional states with the Soviet Bloc. Development, guided by modernization theory, became a strategic tool in US economic diplomacy aimed at fostering political and regional stability. ²² Beginning in the early 1950s, the United States promoted development initiatives including the Point Four Program, which offered assistance designed to counter opposition from below, with US regional experts advocating preventive reforms to maintain stability. ²³ The Kennedy administration actively promoted this developmental approach in both countries in the early 1960s.

Yet royal developmentalism was not simply the product of American diplomacy or oil interests; attributing reforms principally to US pressure – what might be termed ‘methodological imperialism’ – misses the logic of reforms. Both Washington's push for the White Revolution in Iran and the Ten-Point Program, and local rulers’ adaptation of American technical assistance and ideological frameworks addressed domestic and regional pressures. The convergence of American and royal interests reflected the shared recognition that without substantial reforms, political stability in both states would be unsustainable. Recent historical analyses reveal a more complex picture of US influence in Iran and Saudi Arabia, showing that this influence involved negotiation rather than unilateral imposition, with reforms shaped as much by internal considerations as by US political pressure and expertise. ²⁴ Moreover, these US-backed reforms often resembled those promoted by the regional and global left and supported by the Soviet Union, suggesting that similar challenges produced convergent solutions across ideological divides. Aimed to preserve monarchical rule amid growing regional rivalry and counter local and regional leftist movements, they served fundamentally different political purposes.

On 6 November 1962, Crown Prince Faisal, who soon became king, introduced the Ten-Point Program. ²⁵ A couple of months later, on 9 January 1963, Muhammad Reza Shah presented the Six-Point Program, which was later expanded to 12 points. ²⁶ If these initiatives were fully realized, they promised to bring about significant changes that would modernize the societies, economies, and physical landscapes of Iran and Saudi Arabia. The following part compares the content, aims, and implementation of the two programs, examining their social, economic, and political dimensions, as well as their shared logic of preemptive state-led reform.

One area where the two programs notably diverged was in their treatment of religion's role in development. In the Ten-Point Program, reforming religious affairs was a key focus, involving the integration of the ulema into the state's legal framework, safeguarding and promoting Islam, and reforming the Committee of Public Morality. Additionally, Saudi legislation, and thus the reforms, was rooted in shari′a. In contrast, the Twelve-Point Program made no such references. Moreover, the Shah's White Revolution faced religious opposition led by Ayatollah Khomeini, who resisted the land reform and women's emancipation in 1963 and later encountered resistance against the social and economic changes introduced during this time.

Despite the significant difference in how the two programs approached religion, and despite the religious support and opposition that emerged around the socioeconomic reforms in Saudi Arabia and Iran, respectively, interpreting these reforms exclusively through their religious dimensions would be misleading. As demonstrated in the analysis of the Ten- and Twelve-Point Programs, both were primarily influenced by leftist and popular nationalist demands for rapid socioeconomic change aimed at ensuring regime security and stability. Additionally, the programs effectively neutralized similar reform demands originating within their own political elites. Thus, focusing exclusively on differences in their treatment of religion can obscure the substantial similarities between the two programs – particularly their shared approaches to socioeconomic development.

The two programs constituted largescale plans for action. Both states previously employed planning and development plans, but those arriving after the announcement of the programs were much larger in scale and, more importantly, broader in their implementation. ²⁷ The programs emphasized economic growth that would raise local living standards and greater social justice – two clear demands emanating from a decade of political unrest. Furthermore, the two programs shared a similar vision for economic action: improvements in agriculture, industrialization, and the rapid construction of physical infrastructure, including transportation. They also shared a vision of social development through state provisioning of services such as education, health, and welfare.

As shown in the following discussion, the Ten- and Twelve-Point Programs and their subsequent implementation differed in how they pursued these goals. However, both aimed to increase direct state involvement in the economy and penetration into society, while marginalizing other social actors. Hence, an increase in state-led development and authoritarianism dovetailed. Both plans utilized oil revenue to finance their respective socioeconomic development programs. The plans aimed to address the oil disruptions discussed above, not simply to modernize society and the economy, but also to stabilize and strengthen both regimes.

In agricultural development, the core of Iran's planned land reform was land redistribution and the establishment of state-run agricultural cooperatives to run production more efficiently. Although not stated, another important aim of the land reform was to curtail the power of landed elites. In Saudi Arabia, a central goal in agricultural development was food self-sufficiency and generating economic incentives to raise investment in this sector. Less notable in the Ten-Point Program but central to agricultural reform was an attempt at tribal sedentarization – the central effort in Faisal's rural reform policy. Moreover, reforms in agriculture and sedentarization aimed to weaken the intermediary role of tribal shaykhs. ²⁸

Industrialization was at the center of both programs. In the Ten-Point Program, industrialization was to be promoted through state incentives to investors. The program also pledged to secure workers against unemployment. In the Twelve-Point Program, the privatization of state-owned factories was to finance the land reform. The program uniquely introduced profit-sharing in industry, a step towards the socialization of the economy, not unlike the redistribution of land. The Twelve-Point program further pledged to nationalize forests and fresh water, arguing that the state would manage such resources more fairly and efficiently.

From the pledges made in the two programs, it is clear that they placated and attempted to contain the growing modern working class, not least in the oil industry, and the educated and often state-employed middle class. ²⁹ In Iran, the land reform was to bring direct state control over cultivators and drew support for the Shah from the peasantry as a balancing act against the modern middle class. This reform also represented an ideological concession to the intelligentsia, whose members voiced concern for the lower classes. ³⁰ It further catered to fear among the politically aware public and growing professional socioeconomic groups from a bloody revolution from below if conditions did not change. ³¹

In the programs, the concurrent development of rural and urban environments aimed at reducing rural-to-urban migration and urban unrest. The Twelve-Point Program pledged a vast plan for urban and rural reconstruction that would facilitate better standards of living – slum clearance and urban renewal in urban areas and physical regeneration in rural regions. Rural Courts of Justice would further bring state judiciary to villages. The Ten-Point Program pledged to build transportation infrastructure and desalination projects in Saudi Arabia. City development was notably missing, although in practice, it was already underway, not least through the efforts of the US Army Corps of Engineers. ³²

Human development (to use this term somewhat anachronistically) received special attention in the two programs. This attention was particularly evident in education, especially higher and vocational education. These panaceas of social modernization were intended to lead to new avenues of employment – the first allowing entry to professional working-class jobs, the second to the new middle class. ³³

In Iran, welfare services for rural regions were, in a sense, militarized. Taking after a postrevolutionary Cuban model that was popularized throughout the Third World, the Twelve-Point Program committed to expediting their provision through the Literary Corps and Health Corps, similar to the Development and Reconstruction Corps. ³⁴ Faisal's Ten-Point Program offered free social services such as health and education, and in the latter case, also sponsored higher education abroad. To facilitate the fast provisioning of social services, Saudi Arabia enlisted migrant labor, particularly from Arab states, for their bureaucratic, lingual, and cultural expertise.

No less central in the programs and the following socioeconomic reforms was the vanishing act of the role of a broader social agency in formulating these reforms. Although the reforms aimed to cater to strong public demands, they were later portrayed as the benevolent brainchild of leaders. A less kind analysis portrayed them as ruling bargains. ³⁵ In both cases, the programs were similarly portrayed as top-down initiatives with little attention to public pressure that led to their making.

One example of such public pressure is the shared pledge in both programs to reform the state apparatus in response to widespread criticism of inadequate and corrupt public services, including the judiciary. In Iran, the Twelve-Point Program promised an educational and administrative revolution. Saudi Arabia's Ten-Point Program promised better financial regulation and overhaul of the judiciary system. It further promised more job opportunities in the government, a pledge that overtime would lead to the employment of many Saudi citizens with the state. In the two programs, the centralization of government was to go along with a more efficient and just government.

Both programs were essentially preemptive – designed to defuse growing public demands and local, regional, and international pressures through royal developmentalism and top-down, state-led reforms. In Iran, the Shah identified and explained the socioeconomic development program as a White Revolution – a revolution the state took against ‘black reaction and the red forces of destruction’. ³⁶ For him, the black reaction was large landowners refusing to sell land to the government for land redistribution; the red forces of destruction were those on the left that threatened individual rights and freedom. The White Revolution, later known in official terminology as ‘The Revolution of the Shah and the People’ was a top-down attempt at bringing reform, but one done in response to the people's demands. ³⁷

In Saudi Arabia, the Ten-Point Program was no less the result of a precarious political situation and bottom-up or middle-up pressures. Faisal's initiative, similarly, functioned as a counter-revolution aimed at preempting progressive secular politics. ³⁸ In the familiar opaqueness of Saudi politics, the program was not referred to as revolution but rather as continuous efforts at socioeconomic and political change that started under King Saud, which it was. However, in this announcement, Faisal's pledge to redouble state efforts in reforming the country would subsequently turn the country's past evolution into a fast-paced revolution.

The Shah's White Revolution and Faisal's redoubling of reform efforts further turned the central tools of state propaganda in an attempt to bolster their regimes. Both were a concentrated and successful public relations campaign that re-attributed reforms to the Shah and King Faisal while sweeping aside earlier contributors to this scheme. ³⁹ The Shah's book The White Revolution is one prominent example of how he reassigned the reform to himself. In Saudi Arabia, despite an earlier acknowledgment in the Ten-Point Program of King Saud's role in bringing reforms, pro-Faisal historiography would later paint Saud as a traditional conservative and a stumble for this reform, attributing the changes to Faisal. A challenge from within the House of Saud by the so-called Free Princes similarly vanished from later narratives, as did the activism of Abdullah Tariki, Saudi Arabia's oil minister at that time, who pushed for a better oil-revenue deal from Aramco. ⁴⁰

In 1973, a fourfold increase in oil prices revamped the development programs of Iran and Saudi Arabia. ⁴¹ The increase in oil revenues facilitated rush to development, but these revenues and the growing pace of royal developmentalism also brought about a new wave of oil disruptions. To be clear, the rush to develop in the two states was very much path-dependent or relied on the previous developmental visions of the two states and their ensuing institutions. However, the oil boom now enabled a revolutionary scope and scale in implementing existing development programs alongside growing socioeconomic upheaval, inequality, and political unrest.

By 1979, oil disruptions would find a clear manifestation in Iran in a broad opposition to the Shah, leading to a revolution against his regime. In Saudi Arabia, inequality and sociopolitical unrest were manifested most clearly in marginalized social groups – among the Saudi Sunni tribal society and migrant labor, as well as the Shi′a minority. Nevertheless, the boom in development brought significant discomfort, even to those benefitting from this change. These events led to a strong regime reaction against revolts and the resurrection of official religious conservatism. The following analysis explores in greater detail how these dynamics played out in each case.

Iran's rush to development, taking place a decade or so after the official start of socioeconomic reforms, faced challenges created by the reforms themselves. For example, since the early 1960s, agriculture has been commercialized, with large tracts of land now held by commercial enterprises. Through the establishment of state cooperatives, the state became deeply involved in the agricultural production of small cultivators. Still, despite increasing state services, such changes hardly resolved poverty among small landholders and landless agricultural labor. Moreover, they increased unwanted state involvement in rural affairs. ⁴²

Under such changes, rural-to-urban migration was rife in search of better employment, state services, and living standards, now further sponsored by oil revenues. Between 1966 and 1977, many cities grew rapidly and well beyond local demographic growth. The population of Tehran, by far the largest city, but by no means an exception, increased by 65 percent; about half of this increase is attributed to incoming migration. ⁴³

The growth of industry and transport both widened urban areas and created conditions for worker solidarity and collective mobilization. Another significant social change was the fast spread of the modern, educated, and salaried middle class, not least because schooling rapidly increased at all levels, growing threefold since the launch of the White Revolution. Such growth – a central goal of the White Revolution – would also contribute to its demise, with these classes central to the social protests that led to the Revolution. The White Revolution opened up new employment opportunities for female participation alongside political rights, but such rights did not go uncontested by the more conservative parts of society, further leading to social protest. ⁴⁴

Economic growth under oil-boom conditions brought fast-rising inflation in Iran and Saudi Arabia. ⁴⁵ The ever-increasing prices of commodities, food, and especially those of real estate – the result of structural changes in the economy and increase in local demands – was a cause of constant social anxiety during this process. The Iranian and Saudi states were called upon to protect their respective publics, especially those earning fixed wages.

Mass consumption marked a rapid increase in imports of consumer goods. This trend accelerated dramatically during the 1970s oil boom. The spread of mass consumption, while indicating improvements in local living standards, simultaneously fostered rising consumer expectations, social competition, and inequality within Iranian society generating significant social and economic disruptions. ⁴⁶ Furthermore, the influx of imports and the seemingly Western lifestyle they promoted intensified religious and cultural debates about the authenticity of Iranian society and the legitimacy of the regime driving such transformation. State attempts to resolve shortages – housing, for example – created their own social oppositions, highlighting how unsuitable such solutions were for Iranian society. ⁴⁷

Cheaper imports rendered local production obsolete, forcing workers, particularly in urban areas, to seek alternative employment. ⁴⁸ New retail establishments posed direct challenges to the bazaar system. ⁴⁹ Sharp increases in imports led to lengthy queues at ports and commodity shortages, whereas the proliferation of automobiles overwhelmed road networks and degraded environmental conditions through noise and air pollution. In essence, the rapid expansion of mass consumption introduced the familiar contradictions of consumer society into Iranian life, layering demand-side grievances onto existing supply-side discontents in agriculture and industry.

Saudi Arabia experienced an even greater pace of socioeconomic transformation facilitated by largescale incoming labor migration that transformed employment. Expatriates replaced Saudis with manual jobs, and Saudis moved away from agriculture, both crop rearing and animal husbandry, and the little industry that existed for services. Moreover, employment was increasingly bifurcated between Saudis, who were now employed in a fast-growing state bureaucracy and security services, and labor migrants occupying the private sector. Working for the state, the main employer of a growing new middle class, became a form of social welfare or service rather than a simple workplace. In the private sector, Saudis benefitted from formal and informal economic sponsorship and mediation or ‘citizenship rents’ that facilitated their social mobility. Rapid urbanization and, later, suburbanization of the Saudi rural regions were notable results of the oil boom. ⁵⁰

The spread of mass consumption brought the concurrent fast improvement in standards of living alongside shortages in the supply of goods discussed above for Iran, but on a larger scope and scale. The sharp rise in imports overwhelmed existing ports. The use of cars exploded well beyond the construction of roads. Traffic jams became a fixture in daily life, and the rate of accidents was appalling. Air and noise pollution contributed to the unpleasant aspects of car use in Saudi Arabia. ⁵¹ Severe housing shortages – the result of a fast rise in the price of land and costs of construction – epitomized the tensions between fast economic growth alongside growing social expectations and hardships brought by this process. ⁵²

The Saudi state, aware of such hardships and well-funded, took quick steps to ease such pressures. Since 1975, the Real Estate Development Fund (REDF), a state outfit, subsidized first-time ownership of homes by interest-free loans, and further reduction of principle upon timely payment of installments. ⁵³ Nevertheless, even the dwellers of ‘Unayza, a middle-size Najdi city that benefited much from state-led development, were glad that the boom was over. ⁵⁴ For many of those who had gained from it, the transformation of the country and their quotidian lives was far from easy and brought a strong sense of dislocation.

In Iran and Saudi Arabia, the emergence of mass consumer societies coincided with the dialectical intensification of religion in society. Dialectical here means that oil riches and improved living standards enabled ‘investment’ in religion, while sociocultural changes associated with emerging consumer societies raised questions of inequality, lifestyle, and identity alongside religious undertones of protest. This became clear in the Iranian Revolution, which protested the secularization associated with the White Revolution. This process was perhaps also valid for Saudi Arabia, where popular religious resurgence would undermine the legitimacy of the regime. ⁵⁵ Royal developmentalism thus produced religious opposition movements that challenged such developmental authoritarianism.

The two states soon attempted to co-opt their respective religious establishments, albeit in different ways. The White Revolution reduced the economic power of religious endowments. Islamic institutions, such as seminaries, were called upon to be reformed, as was the quest for adaptation in religious teachings and philosophical, artistic, and architectural expressions. ⁵⁶ In Saudi Arabia, the state bureaucratized the religious establishment further, allowing it a more significant sociocultural role in controlling society, but with little political say. ⁵⁷ Still, the intensification of religion in Iranian and Saudi societies would soon play a central role in the politics of the two states.

Before and particularly after the oil boom, Iran and Saudi Arabia rapidly developed their welfare-state institutions. In both instances, the spread of social services, while unequally distributed, contributed to rapid demographic growth and the creation of younger populations in the two states. Between 1956 and 1976, Iran experienced a population increase of approximately 180 percent. ⁵⁸ Nearly half of the population was younger than 16 on the eve of the 1979 Revolution. Similarly, in Saudi Arabia, between 1963 and 1974, the population increased by about 210 percent, resulting in a significantly younger demographic. ⁵⁹ In Iran and Saudi Arabia, rapid population growth further created a constant challenge for the state in provisioning services to citizens.

Also common to both states was the increased growth of bureaucracy and the centralization of decision-making. In Saudi Arabia, such processes gradually took shape since 1953, with the transition of government to Riyadh. Under the post-1973 influx of newfound wealth, these processes accelerated significantly, as increased state treasury lending facilitated a shift in which regional tribal, village, and city-based leadership lost power to state administrators, who now delivered economic improvement and public services directly to the provinces. In Iran, the White Revolution accelerated similar processes, with a notable curtail in the power of large landlords. In both states, large merchant families sometimes benefitted from fast economic growth but lost past political influence. ⁶⁰

State-building processes and deepening state penetration into society facilitated royal patronage. Networks of royal patronage permeated the Iranian and Saudi elites alike; royal appointments to high state positions in the newly expanding state secured elite loyalty. Patronage networks also crossed both societies, fed by increased state provisioning and state employment. Both regimes were aware of the danger of large-scale oil transformation. They heavily invested in the military and security apparatus for greater regional security and clearly for local security as well. ⁶¹

Despite these efforts to secure regime stability and contain social grievances, by 1979, royal developmentalism in Iran and Saudi Arabia faced unprecedented opposition, reflecting growing discontent over the socioeconomic, cultural, and religious changes taking place. In Saudi Arabia, direct opposition came in the form of revolts. In November 1979, the Juhayman al-′Utaybi group, which occupied the Great Mosque, threatened state legitimacy on two levels. First, this Salafi group called for a return to a past, purer Islam, a call to which the Saudis themselves formally subscribed and promoted. As such, the revolt exposed a breach in the delicate balance between Faisal's royal developmentalism and the Salafi religious practice associated with the regime. Second, the capture of the Great Mosque was a significant blow to the House of Saud, the guardian of the holy places, as it further undermined its religious prestige at home and abroad. A closer study of this group shows that it drew most of its members from the politically, economically, and socially marginalized sections of Saudi society, particularly recently sedentary nomadic tribes and residents of foreign origin. ⁶² Such origins demonstrated that increasing socioeconomic gaps were a cause for this rebellion, no less than the al-′Utaybi millennial call.

That same month, the Shi′i uprising in the Eastern Province was also about exclusion from socioeconomic benefits in an oil-rich region. With long-term historical roots, such exclusion was exacerbated in a period when the Saudi regime attempted a better balance between socioeconomic development and religious conservatism – the marginalization of the Shi′i community now played into such conservatism. The uprising undoubtedly carried religious tones resulting from ongoing religious-turn-civil discrimination, and was partly inspired by the Islamic Revolution in Iran. However, the uprising was essentially about being excluded from the fast-paced oil transformation, despite an official pledge to the contrary, and the regime's effort at externalizing the problem – turning it into an external threat (coming from Iran) rather than facing it as a home-grown problem. ⁶³

As significant as these revolts were, the House of Saud maintained a firm hold on mainstream society through the co-opted religious establishment, and it also authorized greater socio-religious control over society. Oil funds that allowed less reliance on female employment facilitated social conservatism, notably gender segregation and female seclusion at home. ⁶⁴ Unlike Iran, the Saudi regime promoted economic change with as little as possible sociocultural transformation, a policy supported by deep pockets. Meanwhile, Faisal's early pledge (in the Ten-Point Program) for basic law and some form of consulting body – to allow public participation in politics – hardly took shape. Politics remained constant and firm at the hands of the House of Saud.

However, in Iran, discontent was more detrimental to the regime. The Shah's secularist vision for the future of Iran and headlong collision with large landholders and the bazaar, both with close ties to the religious establishment, would create a broad social-religious opposition to his regime. Not unaware of the growing social tensions that the White Revolution brought, the Shah introduced a one-party (Leninist-type) system that was theoretically meant to resolve social tensions. ⁶⁵ The Resurgence Party hardly internalized politics or allowed corporatism to gain momentum within this party, as expected. Rather than facilitating greater participation, this party became another symbol of authoritarianism, narrowing the influence of various social groups, rather than allowing them a voice. Moreover, it forcefully recruited citizens, making them unwilling political participants and growing opposition to such a state of affairs. In 1977, under the influence of the Carter administration, the Shah loosened control over voices of dissent, which made opposition more vocal. ⁶⁶ In all such steps, and quite differently than in Saudi Arabia, the Shah lost hold on politics as a result.

The revolution in Iran initially stood on two legs – Islam and Marxism – only to later become an Islamic Revolution. ⁶⁷ This social revolution constituted a coalition of discontent against the Shah's growing autocratic regime and against the outcomes of the White Revolution. As such, it combined social protest against unfulfilled economic promises and resentment towards state authoritarianism and secularization. The social coalition that brought about regime change in Iran was powerful. However, there was nothing inevitable in the downfall of the Shah, with contingency, for example, the Shah's illness playing a significant role in the outcome of the Revolution.

With different outcomes, the Islamic Revolution in Iran, the capture of the Great Mosque in Mecca, and the Shi′i uprising in Saudi Arabia took place under somewhat similar dissatisfactions. The rush to development facilitated by the oil boom created structurally similar disruptions rife with social protest. In the two states, royal developmentalism turned out to be a significant gamble in which rulers bet considerable state resources on socioeconomic leapfrogging to prevent potential social instability. However, overzealous royal developmentalism turned out to be a mounting threat to the Shah in Iran and would contribute to his downfall. Royal developmentalism faired better in Saudi Arabia, not least because the House of Saud tempered the rush to development through greater socio-religious conservatism after quashing both revolts.

How do we explain the Shah's failed gamble, and the only partial success of the House of Saud? Abrahmaian argued that the Iranian Revolution resulted from uneven development or a growing gap between socioeconomic and political change, the former taking place quickly, and the latter stifling or even worsening. ⁶⁸ The same could be argued for the double trouble that the Saudi regime faced in 1979. Nevertheless, such an explanation hardly accounts for the development process in itself – the expectations and hardships it brought leading to the spread of opposition. In the dialectics that the development process created, oil boom funds facilitated socioeconomic reforms while raising social expectations for better standards of living with the spread of mass consumption and social justice in response to growing inequality.

The 1979 crises thus represented the culmination of royal developmentalism's inherent contradictions: rulers had spent decades responding to social pressures with developmental promises, but each fulfilled promise generated new expectations, while each unfulfilled promise deepened grievances. The dialectical process that began in 1953 – where oil disruptions forced royal responses that created new disruptions – reached its breaking point when the gap between rapidly rising expectations and the state's ability to meet them became unbridgeable, especially in Iran. Alongside social mobility, there was growing alienation and dislocation that such rapid social change brought, as well as growing sociocultural anxiety over such change and its impact on daily life. The fast economic development further put pressure on physical and human infrastructure and caused inflation. Therefore, social oppositions in Iran and Saudi Arabia were reactions to the fast yet unequal economic growth processes and hardships associated with the sociocultural modernization embedded in the development process itself.

Since 1979, the paths of Iran and Saudi Arabia have diverged significantly, leading to a rise in animosity between the two states. This divergence, among other factors, has often led scholars to overlook the striking similarities between Iran and Saudi Arabia in the preceding decades. The article highlighted these similarities in oil disruptions and popular demands and in the royal developmentalist responses to such demands. While the White Revolution in Iran and the Ten-Point Program in Saudi Arabia were unmistakably royal initiatives, social agency influenced the various components of the social contracts they established. Both initiatives represented political bargains wherein rulers promised enhancements in living standards and social justice in exchange for political participation, contingent upon fulfilling royal commitments. Throughout, the analysis demonstrates that royal developmentalism was neither benevolent modernization from above nor simple authoritarian co-optation, but rather a complex process of state-society negotiation continuously reshaped by oil disruptions. By comparing Iran and Saudi Arabia, this article reveals how similar structural pressures produced similar political responses across different cultural contexts, ultimately generating similar contradictions.

The analysis of royal developmentalism in the two oil-rich states bears several lessons: First, state formation in petroleum-exporting countries is not simply a unidirectional process of rulers using rents to build autonomous state capacity, but rather a dialectical process where oil wealth generates social forces that continuously reshape state institutions and policies. Second, it shows how external rents transform state-society relations by creating new forms of political bargaining, where legitimacy depends not on representation but on the state's ability to deliver ever-increasing developmental benefits. Third, and closely related, it reveals that the relationship between socioeconomic development and political stability in rentier states is far from being linear. Rapid development can destabilize rather than legitimate authoritarian rule when it creates expectations that outpace the state's distributive capacity. These insights help explain both the durability and fragility of oil-rich monarchies – they possess vast resources for co-optation but face escalating demands that make their legitimacy perpetually provisional. This analysis reveals that rentier state theory's emphasis on distribution obscures the ways oil wealth politicizes distribution itself, creating new grievances, even as it provides resources for addressing them.

Internal elite political struggles further played a crucial role in reforms: First, they mandated the expansion of state bureaucracy and the military to enable more positions of power and excess to resources that oil revenues created. Second, elite struggles widened social coalitions that supported reform initiatives. Third, oil-sponsored reforms challenged existing elites and enabled the rise of new elites through state patronage. Thus, royal developmentalism both mitigated and intensified elite struggle.

The regional dimension proved crucial in shaping royal developmentalism. Revolutionary republics – particularly Nasser's Egypt – established developmental benchmarks that monarchies could not ignore, driving a convergence between republican and monarchical programs despite their opposing political purposes. This competitive dynamic reveals that royal developmentalism emerged not merely as a preemptive response to domestic pressures but also as part of a broader regional contest over developmental legitimacy. The monarchies found themselves compelled to match or exceed revolutionary achievements while preserving their rule, creating fundamental tension that would define their developmental trajectories through 1979. The United States, seeking to bolster both regimes advocated for reforms that often drew inspiration from changes occurring in neighboring states. However, these reforms were not mere imperial impositions; the complex interplay of regional competition, American influence, and domestic pressures produced distinct monarchical adaptations of revolutionary policies, revealing how similar reform programs could serve fundamentally different political purposes.

Post-1973, the surge in oil revenues presented new opportunities for developmental leaps, but, as in the past, such progress triggered significant challenges. In both instances, development brought about socioeconomic and cultural disruptions alongside economic growth and social mobility. The year 1979 witnessed severe social repercussions in both states, stemming from growing inequality and social tensions, alongside cultural and religious dissatisfaction resulting from the rapid pace of socioeconomic transformations. While the outcomes differed significantly between the two states with the downfall of the Shah, the grievances expressed in the uprisings of the two states were surprisingly similar against this backdrop.

After 1979, the House of Saud remained in power, the Islamic Republic of Iran turned its back on the royal regime. Yet, both regimes remained challenged by the same royal developmentalist legacy – the expectation that states must deliver ever-expanding benefits to maintain legitimacy – while facing a future, post-oil era. For decades, each managed these pressures differently: Saudi Arabia through expanded welfare and religious conservatism, Iran through revolutionary ideology and resistance economy.

Since the second decade of the twenty-first century, however, new pressures have emerged. In Saudi Arabia, the Arab revolts’ potential spillover effects, coupled with inner-elite struggles, pushed for another era of royal developmentalism, but now of the neoliberal, Vision 2030 kind. Unlike in the past, the socio-religious conservatism of the Faisal era was abandoned in a new age of nationalism and growing authoritarianism. Whether this will create a new kind of citizenship remains to be seen. In Iran, the revolutionary legacy, set against past royal developmentalism, strongly influences both social tensions and intra-regime politics. The regime remains committed to its original socioeconomic pledges and anti-imperial stance, even as protests over economic conditions echo the pre-1979 demands for development and justice.

In both states, regional and global influences continue to play a crucial role – Saudi Arabia pursues reforms to compete with Dubai, while Iran's hesitance reflects both ideological commitments and international sanctions. The history of royal developmentalism suggests that such attempts to have development without political transformation remain inherently unstable, generating new contradictions even as they resolve old ones.