The relationship between the state and the market is one of the central issues in the political economy of development, and the nature of the interaction between these two institutions plays a decisive role in the success or failure of development strategies. In recent decades, Qatar and the United Arab Emirates, as two oil-based economies in the Persian Gulf region, have achieved relatively successful outcomes in economic development, economic diversification, and international competitiveness through the effective utilization of hydrocarbon revenues. This study aims to provide a comparative analysis of state–market interaction in advancing development in the political economies of Qatar and the United Arab Emirates and to identify its implications for development governance in Iran. Adopting a qualitative approach and employing comparative and documentary analysis methods, the study examines the developmental experiences of the two countries within the theoretical frameworks of the developmental state and late rentierism. The findings indicate that the relative success of Qatar and the UAE has resulted neither from complete state dominance over the economy nor from absolute market liberalization. Rather, it has emerged from the formation of a complementary and purposeful pattern of interaction between the state and the market. Within this framework, the state has facilitated private-sector activity and investment attraction through strategic planning, infrastructure development, effective management of rent revenues, and the establishment of developmental institutions. The findings further suggest that the experiences of the two countries can be explained through a common model referred to as the “Developmental Regulatory State.” Accordingly, strengthening state institutional capacity, supporting a productive private sector, and adopting development-oriented management of oil revenues constitute the most significant implications of this study for development governance in Iran.

Keywords:State–Market Interaction; Political Economy; Developmental State; Late Rentierism; Qatar; United Arab Emirates; Development Governance in Iran.