The countries in the Third World that managed to achieve progress are those that devoted efforts to formulating specific strategies and policies. The most successful among them were those that relied on public participation in designing these strategies and making key decisions on development, thereby creating conditions for members of society to play their roles as responsible and informed individuals. Using Francis Fukuyama’s theoretical framework, this article seeks to examine Iran’s development status compared to Saudi Arabia before and after the Islamic Revolution. Iran and Saudi Arabia are geographically located in the same region and are relatively close in political terms; however, what has been observed in recent decades is that Saudi Arabia has achieved a more favorable level of development compared to Iran. This research is developmental in aim and adopts a comparative institutionalist method. Its data have been collected through library research and updated online sources, and qualitatively analyzed through content analysis. The central question of this paper is why Iran’s achievements, despite its notable efforts over the past decades, have been fewer than those of Saudi Arabia. The findings indicate that Saudi Arabia, by establishing a strong institution known as the state, optimizing its bureaucracy, and properly implementing the rule of law, has succeeded in opening the path toward development and has adopted a broader and more comprehensive approach to development compared to Iran.