Strategic choices made for the purpose of economic development may have unintended consequences. Such consequences are the result of interplay between noneconomic and economic factors. It is argued that growth strategies that ignore noneconomic factors may result in a counter-economic development. To illustrate such a possibility, a Counter-Economic Development Model is proposed. Using this model as a framework, social, cultural, political, and economic situations in pre-revolutionary Iran are analyzed, and implications for the process of economic development in developing countries are presented.