Economic liberalization policies in the 90s led to substantial military autonomy in Egypt but much less in Iran. Why? This paper examines the effect of privatization on the degree of military autonomy attained by these militaries. Prior to the economic reforms, the centrally-planned states of Egypt and Iran utilized their militaries to implement development projects. Post-liberalization in the 90s, these militaries expanded into new economic sectors such as finance, manufacturing, and trade. The expansion impacted the balance of civil–military relations (CMR) differently in each case: Egypt’s military took over the state while Iran’s Revolutionary Guard became a coalition-maker. This paper argues that modes of privatization are crucial in explaining CMR variations. Economic reform led to varied capitalist development trajectories, which conditioned the empowerment or disempowerment of militaries vis-à-vis the private and semi-public sectors. Rapid privatization in the absence of strong market institutions increased militaries’ opportunities for asset-stripping. Conversely, economic policies that strengthened both market institutions and private sector growth, or facilitated an increase in number of competing economic actors, constrained a military’s economic leverage. The ultimate results were divergent control patterns since the two militaries had varying degrees of success in capitalizing on their economic power and translating it into political leverage.