How Hezbollah built power in Lebanon through financial and social networks as much as weapons arguing that dismantling this parallel economy is vital to restoring state authority.
The shadow economy
There is little dispute that weapons were the decisive factor behind Hezbollah’s rise and the consolidation of its power, power that has come to dominate Lebanese political life almost entirely. From this perspective, disarming the group appears as the natural gateway to restoring state sovereignty, not merely as a sovereign act in the narrow sense, but as a necessary step toward curbing Hezbollah’s political clout. More importantly, it would open the door to a long-overdue process: the beginning of the Shiite community’s emancipation from the monopoly imposed upon it for years.
Yet reducing Hezbollah’s influence to the issue of weapons alone, despite its undeniable centrality, remains an incomplete diagnosis. Hezbollah did not build its dominance solely through military force. It constructed a comprehensive system in which religious, cultural, and social factors intertwine, blending ideological commitment with dense networks of social control. At the heart of this system lies a pillar no less critical than arms: money. Financial power has consistently served, alongside military strength, as a cornerstone of Hezbollah’s endurance, expansion, and ability to shape political outcomes.
Finance, together with weapons, has been instrumental in entrenching Hezbollah’s exclusive grip over the Shiite community. It has also been one of the most effective tools for extending its influence beyond that community, reaching into other sects and political forces. In this context, money is not merely a supporting resource; it is a fully fledged instrument of power, rivaling military force in its impact.
Over the years, Hezbollah has painstakingly built a vast network of institutions, companies, and business ventures spanning multiple sectors: trade in its various forms, banking and financial services, contracting, construction materials, food supplies, tourism and travel agencies, among others. This network has provided additional streams of revenue while simultaneously offering cover for money laundering and the recycling of illicit proceeds.
The party went further still, establishing an integrated ecosystem of financial, health, educational, and social institutions. Through this structure, Hezbollah has managed to achieve several objectives at once: delivering services to large segments of the population, deepening its social presence, securing steady sources of funding, and using these institutions as parallel financial channels that reinforce its capacity to survive and expand.
In this light, the financial and service-based system Hezbollah has created rivals, both in function and in risk, its military and security apparatus, if it is not in fact a primary lifeline for it. Money is the fuel that sustains the weapons, providing them with the social and political cover they require to endure.
Through this financial machinery, Hezbollah has also penetrated other sectarian and political environments by funding political figures and parties outside the Shiite community, in exchange for cross-sectarian political protection for its broader project. As a result, its influence has ceased to be confined to its core constituency and has instead morphed into a distorted form of national influence, one rooted in dependency rather than genuine partnership.
This dynamic cannot be separated from Hezbollah’s role as a central player in Lebanon’s entrenched system of state corruption. The party maintains close ties with contractors and service providers who benefit from inflated contracts and bloated budgets drawn from ministries, public institutions, and state-affiliated funds. Through these partnerships, along with quota-sharing arrangements and mutual-interest deals with allies, and even with some political adversaries, a dense web of interests has emerged. Its unwritten bargain is simple: protect positions and profits in exchange for turning a blind eye to Hezbollah’s weapons and political agenda, or at the very least refraining from addressing them with any seriousness. In this way, Hezbollah has succeeded in constructing an integrated model that fuses money and arms, a hybrid best described as an alliance between militia and mafia.
Seen from this angle, any serious attempt to confront the corrosive influence Hezbollah exerts over Lebanese political decision-making, particularly within the Shiite community, cannot be limited to the weapons file alone. Dismantling the financial and service-based infrastructure that has nurtured this influence, enabled its deep penetration of state institutions, and distorted Lebanon’s social fabric is no less vital than dismantling its military and security apparatus. Without addressing this parallel financial state, disarmament alone risks treating the symptom while leaving the disease intact.
