Corruption is a serious problem in Iran, being widespread, mostly in the government. Reformists and conservatives alike – routinely criticize corruption in the government.

Transparency International’s 2022 ranking of perceived corruption in 180 countries found Iran somewhat more corrupt than average—25 on a scale where 43 is average.

As of 2019, corruption, nepotism, cronyism, (along with mismanagement and lack of “much needed” structural reforms), are blamed for country’s economic shortcomings such as the 50 to 70% of workers “in danger of falling into poverty”, lack of job creation, poor housing, inflation, stagnating incomes and unacceptable rates of poverty. One of the objectives of the Iranian revolution was to have no social classes in Iran. Yet, Iran’s Department of Statistics reports that 10 million Iranians live under the absolute poverty line and 30 million live under the relative poverty line. Iranian President Rouhani has linked social ills, including poverty and homelessness, to corruption. (These problems have often been attributed to the economic sanctions imposed by the U.S., but Hossein Raghfar, an economist at Tehran’s Alzahra University, has suggested that they may be responsible for as little as 15% of Iran’s economic woes.) A study of income inequality (by Djavad Salehi-Isfahani) found levels as discouragingly high (a Gini coefficient of above 0.40) in 2002, 20+ years after the revolution, as during the Shah’s time in 1972, “pointing to the lack of inclusive economic growth”. Corruption or the uncovering of corruption has led to unrest in the form of riots, strikes, anti-government demonstrations — likely connected with the decline in economic growth corruption brings.

Ali Fathollah-Nejad describes an impediment to economic function and justice as a “political economy that favors regime loyalists… ‘insiders’ (khodi) or those with access to state resources and privileges also enjoy privileged access to jobs.”

According to Iran International, the privatization drive that began around 2007 led mainly not to efficiently run private firms competing for business, but “quasi-governmental firms controlled by powerful insiders” who earn economic rent from activities such as blocking competition, “using public funds to stay afloat”, “insider information to benefit from foreign exchange and gold price fluctuations when the government intervenes in the market”, and circumventing sanctions to sell sanctioned goods at high prices.

An example of more straight up corruption in Iran (circa 1990s) comes from Nobel Peace Prize winner, Shirin Ebadi, who gave up on the practice of commercial law as a waste of time—”What was the point of knowing case law and preparing a defense” when decisions were decided by bribes?

The Islamic Revolutionary Guard Corps has often been cited for its great power and privilege. According to Hooshangt Amirahmadi, director of the Center for Middle Eastern Studies at Rutgers University, “A lot of ministers and governors are from the Revolutionary Guard… They are using the money to buy loyalty and create power bases.” Among the questionable activities the Corps has engaged in are the operation of an “an illegal airport” near Karaj City—discovered in 2005—where it imported and exported goods “without any oversight” . Also in 2005 it stormed the new Imam Khomeini International Airport in Tehran and shut it down. allowing it to reopen under Revolutionary Guard management.

In 2016 then-President Mahmoud Ahmadinejad vouched to fight “economic/oil Mafia” at all echelons of government. He also proposed that lawmakers consider a bill, based on which the wealth and property of all officials who have held high governmental posts since 1979 could be investigated. Out of the $700 billion earned by the state during the presidency of Ahmadinejad for the sale of oil, $150 billion could not be accounted for. On February 3, 2013, President Mahmoud Ahmadinejad played a video tape in the Iranian parliament that tied the heads of two branches of the government, the legislative and judiciary, to a documented financial corruption case related to the Larijani brothers.

Iranian Supreme Leader Ali Khamenei has stated that although there “are cases of corruption; it is not systematic” in Iran. On the other hand, a Reuters special investigation found Khamenei controls a massive financial empire built on property seizures worth $95 billion. He also said in 2023 that malpractice and corruption were “contagious” and leading to instability in the Judiciary.

Some explanations suggested for corruption in Iran by Mohammad Hossein Ziya include:

• the lack of freedom of information undermining the ability of independent media to expose corruption;
• the lack of power among civil society and non-governmental organizations active in reporting and attempting to fight corruption;
• the lack of transparency in state-owned and semi-state-owned companies;
• the so-called circumvention of sanctions, which involve a small group close to the government and who are major culprits in corruption.