Development in our country has faced many ups and downs. Iranians’ general feeling and historical experience imply that national development faces fundamental challenges. From the past to the present time, this question has been raised in public and among the elites: ‘ Why Iran has not been developed as it ought to be or has not reached sustainable development, and what is the main impediment in its way to progress. ’ To answer the above-mentioned question this paper tries to show that lack of institutionalization and establishment of rule of law should be regarded as the main barrier to the Iran’ s national development. In the system level analysis, we believe that the root of rule of law challenges rest on the underdevelopment of the legal system. Studying the inter-connection between the main concepts such as rule of law, legal development and national development leads to the conclusion that ‘ the way of Iran’ s national development goes through the country’ s legal development. ’ This paper has taken advantage of the theoretical framework and conceptual model of rule of law and the concept of legal development. The main approach of this article includes a novel viewpoint based on the concept of ‘ law as dispositif, ’ ‘ constitutional amendment, ’ ‘ codification and purification of general policies, rules and regulations, ’ and ‘ securing and regulating fundamental citizenship rights. ’