By the time the Fifth Development Plan was adopted in 1973, Iran had already experienced more than three decades of governmental efforts towards economic development. These efforts first started in the early 1920s and culminated, in the postwar period, in the country's First Development Plan. Before discussing the second and subsequent plans, it will be useful to review the main features of the initial efforts at planning in Iran.

The development policies of the government during the reign of Reza Shah (1925-1941) did not constitute development planning as the term has come to be understood in the postwar economic literature. The prewar policies were restricted to partial investment programs for the public sector only, with little consideration concerning the activities of the private sector. Furthermore, even the public sector programs did not reflect any explicitly defined set of policy objectives.

Iranian villages generally contain two distinct social classes: (1) peasants who cultivate land they own and/or rent, and (2) landless non-farmers who engage in various commercial, service, and labor activities appropriate to an agricultural economy. Peasants generally employ one term to designate all landless villagers; the most widely used is “khwushnishin.” Although for peasants this term is useful, it poses some difficulty for the social scientist since khwushnishins do not comprise a homogeneous class, but rather are a collectivity of diverse occupational groups sharing in common only a landless status. Included among the khwushnishins are some of the wealthiest, as well as some of the poorest, of all villagers. In terms of economic and social stratification, one can identify at least three separate groups of khwushnishins. In this paper I propose to describe these three groups and analyze their unique roles in the villages.