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A major example of the state’s role in the economy can be observed in the construction of the Trans-Iranian Railway (1927-38), a project which cost β30,000,000, a sum nearly equal to the oil revenues for a decade. Financed domestically so as to avoid foreign debts, the railway not only inflated the size of the bureaucracy, but also immediately increased the extent of bureaucratic penetration into society, since the necessary funds were raised through taxes on tea and sugar.
