US Foreign Policy

The Absence of a US Policy towards Iran and its Consequences

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This analysis is based on a presentation given to the American Academy of Diplomacy on May 27, 2004

Iran remains in the very-hard-to-do box when it comes to developing a coherent and sustainable American foreign policy.  US-Iranian relations over the past 25 years have gone from volatile, intense in the immediate aftermath of the revolution, to long periods of inertia and estrangement.   Nearly all of the ties that once existed between them—government, military, business and cultural relationships that thrived as recently as the 1970s – have been deconstructed.  Painfully few Americans today know or visit Iran. Yet it is essential to accept the premise that Iran is indisputably a pivotal state in the Middle East. It is a natural hegemon in its own immediate neighborhood, a powerful voice in the world of Islam, a potential middle power on the global scene if it uses its oil resources and its leverage and its remarkable human capital wisely, and a real country in a zone of failed or failing states and polities.

For the United States, the sole superpower, to ignore a country with such potential and promise, or to continue to be unable to articulate a coherent policy seems unacceptable.  It has been a chronic problem over the past 25 years, but seems particularly acute at present.  The US government and the American people simply have trouble getting the U.S. stakes in Iran in focus. We have so long operated with a near-total estrangement from Iran that we have come to see Iran only as a set of problems. We tend to equate Iran with either the weapons of mass destruction (WMD) problem or the terrorism problem or the opposition to the peace process problem.  We have lost an ability to think about Iran as a three-dimensional country of great size and natural richness and potential power, and to develop an appropriately complex and multifaceted policy towards the country.

When the Clinton Administration, pressed by a conservative Congress disturbed by new evidence of Iranian terrorist activities, worked on new sanctions on Iran in the mid-‘90s, it was striking how much the U.S. business community, which once had a very strong voice in articulating one set of American interests in Iran, was silent.  Major American companies no longer engaged on U.S. policy to Iran, because it was controversial and politically risky, and because they had found alternative markets in the region.  Most companies couldn’t even remember how much investment and trade they once had with Iran, and so that voice, as one of the American interests in Iran, had virtually disappeared in policy formulation.[1]  It left only the government to think about Iran and therefore, Washington has tended to look on Iran as a set of national security problems, not as a more diverse set of interests that could drive a rich and comprehensive policy.

The policy dysfunction applies to Tehran as well as Washington.  Iran has a parallel problem in developing a coherent policy towards the United States, although the level of interest and knowledge about the United States is stronger than American knowledge about Iran. The mullahs in power worry a lot about what America has in mind for them and often misinterpret US policy, which has not been explained directly to Iranian leaders in many years.  They too manage disparate interests vis-à-vis Washington that make it hard to develop a coherent policy, and the anti-Americanism of the original revolutionary leaders is now matched, paradoxically, with apparently strong pro-American sentiment among Iranian youth and others disaffected with clerical rule.  Developing a rational and sustainable America policy in Tehran appears to be as hard as the challenge facing policymakers in Washington.

We can, from a distance, try to analyze the state of the revolution in Iran. It is undoubtedly true that one of the core beliefs of the revolution—that the United States did Iran harm—remains alive. Therefore we need to understand that although revolutionary fervor in the country has diminished, it will be hard to get the group that led the revolution to fully reverse its position. What we are seeing now is mostly tactical change in how Iranians talk about the United States.

We have to bear in mind is that the revolution did achieve a tremendous goal in the eyes of most Iranians: it satisfied a deep desire in the Iranian society for genuine independence and an end to any interference by outside powers. Even secular- and reform-minded people would still take pride in this accomplishment.

Moreover, as Shaul Bakhash, one of the most astute Iran watchers in the United States, argues, the institutions that were established in the early years of the revolution have proven to be remarkably durable.[2] Bakhash observed that even the Shah would be jealous of how strong executive authority is in Iran today. These unique, cleric-run institutions have promoted social mobility for their core supporters and have created new elites who constitute a solid political base for the regime.  Economic power has shifted to those supporters, with little accountability and considerable room for corruption.  In terms of the national institutions, power is concentrated in the hands of the people who still believe in the revolution even if the society below is quite disaffected and fed up.

Another way to think about the US-Iran dynamic is to look at the tremendous asymmetry of power and interest. The United States’ foreign policy agenda is global. Iran does not drive our foreign policy decision-makers every day, and the Administration can defend its lack of attention to Iran policy by pointing to all of the acute challenges it has faced particularly since September 11.  For Iran, by contrast, the United States looms as a constant cloud, more ominous since American troops arrived to both its eastern frontier (Afghanistan and Pakistan) and to its west, in Iraq.  All of Iran’s foreign policy actions and decisions have a U.S. dimension, implicit if not explicit.

But strangely, there is a symmetry of grievances: both parties believe it is up to the other party to set the record straight and to make the moves necessary to establish a base for an improved relationship and for dialogue. Over the last quarter century, both parties have worked to identify what needs to be done since this abrupt divorce, but we have to look at it almost as an “Alphonse and Gaston” type of rapprochement: when one party is ready, the other isn’t, and then we switch places in terms of readiness to initiate talks.

The best window of opportunity might have been the late 1990s: Khatami was elected president in 1997 and the Clinton administration declared that it no longer believed in regime change and that the United States respected the Islamic character of the Iranian state. Although a number of very interesting and promising initiatives took place, for still obscure reasons, American and Iranian leaders were not able to create any sustainable momentum to create a new dynamic in the relationship.

It is important to keep in mind that Persia has chronically been a challenge for American diplomats. This is best illustrated by a quote from Americans in Persia, a book published in 1946 by The Brookings Institution, which berated US policymaking towards Persia at the time:

“Our failures in Persia may be explained by poor organization, by defective or inadequate informational services, by a lack of coordination among the departments in Washington, by disagreements among officials of the State Department, causing confusion of purpose, delays, compromises or total paralysis, by personal jealousies and intrigues, and by incapacity or laziness.”[3]

It may be reassuring to realize that policy towards Iran has always been a struggle, but over the past decade, there has been a lurching and uneven policy process, and little to show for intermittent serious efforts to deal with the enduring and more immediate challenges that Iran poses to US national security. 

A decade ago, US foreign policy-makers came to the conclusion that questioning the legitimacy and durability of the revolution was no longer an appropriate policy stance.  The revolution had proven durable, and there had to be an effort to engage Iran as a legitimate international actor regardless of the painful rupture in bilateral relations. The Clinton Administration announced its interest in engaging more robustly with Iran, and its desire to take a more flexible approach to the Islamic republic.  In an important speech to Iranian-Americans, Secretary Madeleine Albright said that the US recognized Iran’s importance, and that “we have no intention or desire to interfere in the country’s internal affairs.  We recognize that Islam is central to Iran’s cultural heritage and perceive no inherent conflict between Islam and the United States.”[4]

This approach lasted until 2002, when the U.S. government reintroduced the idea of regime change in Iran as a critical American objective. In his “Axis of Evil” speech, President Bush announced his vision:

“Our goal is to prevent regimes that sponsor terror from threatening America or our friends and allies with WMD. We know their true nature. Iran aggressively pursues these weapons and exports terror while an unelected few repress the Iranian people’s hope for freedom. States like these and their terrorist allies constitute an axis of evil, arming and threatening the peace of the world. These regimes pose a grave and growing danger.”[5]

This reintroduction of the concept of regime change has clearly framed the policy debate towards Iran, but it does not constitute a policy per se. After the president laid out his idea, no follow up occurred.  The United States, therefore, in 2004, still lacks an appropriate declaratory policy that addresses the full range of national interests that are at stake in Iran, a policy that would communicate to Americans and to Iran what the US seeks to achieve and how to move forward in this long-stalled relationship.  To develop such a policy, one would seek to revisit, with a fresh look, all aspects of Iran’s behavior to determine where the threats and opportunities lie, and consider a range of policy approaches.    

Considering regime change as a policy option requires examining two key questions: first, is it desirable and second, is it feasible?

It might be desirable if Iran had a more open system, a more worldly set of leaders, people less suspicious of the outside world, more willing to discuss their problems publicly and to work more directly with their neighbors for common security purposes. On the top of all this, and according to polls and elections in recent years, at least a majority of the Iranian society would prefer a different set of leaders and a different government. The analogy with the Soviet Union is worth considering: what we have seen in Iran so far is the Gorbachev but not the Yeltsin. The leadership goals of President Khatami are to reform the system, not to change it.

No radical reformer has emerged from inside Iran in the past years. Current US policymakers, and those with policy influence who believe that Iran is a grave danger to the United States, have been struggling to imagine the alternative to the current regime. They are looking for partners, interlocutors, agents of change within Iran. The few ideas they have considered have proven unfeasible.  At one point, the Bush Administration flirted with the notion that the Mujahedin-e Khalq, an Iranian opposition movement based in Iraq during the Saddam Hussein era, might be a partner, seeing an historic analogy to the Northern Alliance in Afghanistan. It turns out that this option leads nowhere, given the MEK’s record as a terrorist, almost cultist organization with no strong base inside Iran to promote change.  Now there is speculation that the Bush Administration and its allies in the new Iraqi government might consider trading MEK members in Iraq for al-Qaida prisoners currently in Iran.

The Bush administration also hoped that the student riots in Iran in 2002 reflected a grassroots movement, a new generation that might trigger another revolution, a counterrevolution to the revolution of the ‘70s. But the prevailing sentiment in the country appears to be an aversion to disorder.  According to Iranian experts, even those who do not support the clerics fear the repetition of the period of great chaos and uncertainty that they experienced only a generation ago.  In periods of tension, rather than fighting the state forces that are repressing political activity, reform minded people seek compromise with the regime, are willing to back down and avoid more prolonged confrontation. People who are thrown into jail are let out a few months later. This iterative process between the different internal forces precludes the formation of enough momentum or tension to generate political change.

As for feasibility, Iraq should have humbled US policymakers about what it takes to achieve regime change and whether the United States can be the agent of change. Let us just remind ourselves that the United States tried regime change in Iran once: in 1953, the United States supported the Mossadegh coup and the restoration of the shah. A generation of Iranians lived off of that wound. It festered. It became very much part of the national myth and the modern history of Iran, and certainly contributed to some of the intellectual ideas that created the revolution. The United States was the agent of change once.  While frustrated youth may wish for an American invasion, one cannot fully grasp how traumatic to the Iranian psyche a new American intervention would be, and it could easily unleash a spontaneous reaction at least as violent as what has occurred in Iraq.  Lastly, it is important to remember that Iran is territorially and demographically roughly three times the size of Iraq.[6]

An alternative policy approach is containment.  Anthony Lake, President Clinton’s first National Security Adviser, updated a decade ago Kennan’s Soviet-era thesis of containment:

“We seek to neutralize, contain, and through selective pressure perhaps eventually transform these states—Iran, Iraq, and North Korea—into constructive members of the international community.”[7]

The Clinton administration worked with this concept of containment as its principal paradigm for policy towards Iran.  The Administration thought that there were elements of Iranian behavior that were dangerous for the security and stability of the region, and believed that, through a containment strategy, it could prevent Iran from being a destabilizing force.  Policymakers assumed that over time Iranians themselves would transform their system, or as in the Soviet model, and let the revolution fall of its own contradictions. The driving assumption was that though isolation and the pressure of sanctions, without the need for external interference, dynamics would change within Iran.  Change initiated from within would be seen as more legitimate and enduring than an external intervention.

In fact, US policy toward Iran has always included some form of containment since the revolution. The United States has imposed sanctions and then sometimes removed them for explicit purposes: imposed after the hostage taking in 1979 and lifted in part as part of the Algiers Accord that ended the hostage crisis; imposed due to concerns over proliferation and terrorism, and partially eased to permit more trade and human contact in 2000.  Sanctions are one concrete manifestation of the desire to physically contain Iran: to deny it the means to project force beyond its borders and to be a regional aggressor.  Sanctions are also intended to provide incentives for changed behavior.  For some, a robust containment cum sanctions strategy could create conditions for regime change, although it is usually not expressed in those terms.[8] 

Containment as a strategy in the 1990s could be considered at least partly successful, as measured by Iran’s inability to achieve its own goals in terms of conventional military modernization. Iran was somewhat preoccupied with its own domestic economic problems, and so containment was sufficient to deter any truly destabilizing activity on Iran’s part. Today, the Iranian nuclear challenge makes it clear that a containment strategy alone is no longer sufficient. There is a need for interaction and discussion.

Containment is often the least bad option, but it has serious limitations. It is a holding position, waiting for a policy that can achieve more direct results. Over time, it allows the United States to postpone thinking rigorously about the steps needed to achieve a clear goal. It allows policymakers to delay a more serious consideration of the stakes.   It is also likely to fail if it is unilateral; European allies have joined, sometimes reluctantly, in parts of the containment policy over the past decade, but China and Russia have opted for more engagement, thus weakening the potential impact of containment.  The nuclear revelations over the past year, however, have created a closer spirit of cooperation between Washington and Europe on the need to prepare for strong measures should Iran fail to comply with its international obligations with respect to nonproliferation.

There is still a strategic case for containment in Iran because in its isolation, Iranian society is debating all the critical issues, and change from within could well occur.  More conservative elements won a major victory in the February 2004 legislative elections, and routed the reformers, but the long-term prospects for a conservative dominance seem thin because the reform impulse inside Iran remains strong at the societal level. Reformers will eventually prevail; do the United States and the international community believe that they have the time to wait for this slow and fitful process of change? Would internal change in favor of reformers actually resolve all the issues of concern to American policymakers?

Engagement of course is at the other end of the spectrum. Over the years, the United States has engaged Iran, but the level of interaction has fluctuated from extremely modest steps to more ambitious moves, and the type of interaction has hinged on the goals pursued by various administrations. The United States talked to Iran during the Iran-Contra period, the two states shared their concerns about the Taliban at the United Nations in New York, and as recently as the first year of the Bush administration, diplomats met in Europe to discuss a range of issues, but those talks were cut off when it appeared that Iran was implicated in a terrorist bombing in Saudi Arabia in spring 2003.

Engagement today includes some interesting track-two diplomacy initiatives with private Iranians, including some who have strong ties to Iranian officials. It is striking that some of these track-two exchanges are including increasingly senior former U.S. officials, as well as current members of Congress. What is not clear is whether this dialogue is happening with people who can influence Khamenei, Iran’s supreme leader. They may be people that are closer to the president than to the supreme leader. And it is certainly clear that track-two diplomacy alone would be insufficient to make progress on the nuclear question.

But even engagement might not be enough considering the asymmetry problem outlined before.  The United States now issues visas to Iranians: nearly 10,000 Iranians a year get visas to come to the United States. They visit their families, but also study, do business, and visit as tourists. On the other hand, it is still very hard for Americans to get visas, and only few thousands Americans visit Iran every year. Most of the information we get from Iran comes from journalistic reporting, but even journalists face difficulties in entering and covering Iran. The relationships are not personal, and there is no real US curiosity for Iran. Engagement is therefore restricted.

The goal of engagement has also to be defined. From minimal contacts to a grand bargain, the range of outcomes is wide and diverse. We might very well be at a critical juncture: because it is an election year in the United States, people are increasingly thinking about American options for next year. There are even talks of a grand bargain from the American side. This overture does not seem to resonate on the Iranian side. Nevertheless, the United States should continue to consider all the options because hard choices will be made in the near future. The United States must first determine what matters most with regard to Iran. Many in the think tank community consider that the nuclear issue is taking preeminence over the other issues that divide the two countries, and argue that US policy toward Iran should focus primarily on this issue. Yet, it would be counterproductive to allow a single national security issue to be the content of a new interaction with Iran: the United States should define a more comprehensive approach to Iran that takes into consideration the different U.S. interests.

Engagement under any circumstances has downsides when the country one is dealing with does not share common values or operates from a different concept of the international system and what constitutes cooperation on strategic issues. Engagement also gives the other side a lot of leverage and it, like containment, can sometimes sustain the status quo more than promote positive change. Many Iran watchers believe that the clerics want to own the relationship with the United States, not let the reformers be the only interlocutors of the West. They want to be involved in the engagement process because they think this will legitimize their authority in the eyes of their own people. Ironically, the very clerics who demonized the United States now want to gain domestic support by interacting with the former Great Satan.

Conclusion  The United States lacks a policy toward Iran. The abundant rhetoric of the current administration does not constitute a policy in itself. What we have is a general sense that Iran remains a threat to U.S. interests through its opposition to the peace process, its nascent nuclear program, and its links to terrorist groups. What we haven’t seen so far is a systematic review of policy assumptions that looks at all aspects of current Iranian behavior, including the nature, scope, and specificity of Iranian threats to US interests.

Inertia characterizes the current approach. Iraq remains the main focus of US policymakers, and Afghanistan requires sustained attention too. Some could argue that the U.S. military presence in both Iraq and Afghanistan, Iran’s two largest neighbors, suggests a coercive US policy toward Iran. Some Iranians perceive it this way too, and fear that the United States’ military posture in the region reflects an aggressive agenda toward Iran that will soon be implemented.

In Tehran, the hardliners want to control any interaction with the West, and engage the United States from a position of strength. They believe that they need a little time to consolidate their recent electoral victory that they just achieved by essentially setting back the course of Iranian democracy by disqualifying many of the reform-minded candidates.

Although the United States initially disagreed with the European rapprochement, the Europeans have over time conditioned economic and trade inducements to progress on what matters most to the United States. The EU is conditioning a trade and cooperation agreement (TCA) to prerequisites related to terrorism, the nuclear program, human rights, and the peace process.

However, the Europeans came to realize that the Iranians could not satisfy their part of the arrangement. The complex deal put forward by the EU requires Iran to make major changes in its domestic and foreign policies, and Iran cannot meet these conditions. Therefore, the European channel seems to be in a stalemate, with little foreseeable progress. The real question is whether the multilateral track—in other terms, the IAEA—can deliver on the nuclear issue. Iran seems undeterred by the international community’s complaints over its nuclear program, and the recent IAEA statement that “deplored” that “Iran’s cooperation has not been as full, timely and proactive as it should have been,” was sharply rebuked by Iranian national security officials.

Defining a new way of approaching Iran is difficult, but the United States should think hard and look at all the dimensions of the Iranian challenge. First, the United States must determine whether Iranian involvement in Iraq constitutes a problem or an opportunity. Washington thinks of Iran as a predator, but it must be acknowledged that Iran has legitimate political and cultural interests in Iraq and seeks to preserve them. Different parts of the Iranian system maintain good relations with their respective allies within Iraq, and they certainly want a say in the future of the political system in Iraq. The difference between active involvement and subversion or undue influence is thin, but important.

Being overly alarmist could be counterproductive. Iraq’s Shia so far display little empathy for Iran’s theocratic system, so the danger of seeing Iraq evolving into a Khomeini-like system is small. Still, Iraq’s Shia will expect to maintain a very close and friendly relationship with Iran. Whether this relationship is viewed as a threat or as an opportunity to engage Iran and foster regional stability is up to policymakers, and the degree of risk they are willing to bear.

On the Palestinian-Israeli front, although most Iranians today seem to care less about a settlement to the Palestine question than they have in the past, the Palestinian issue remains an existential one for the clerics themselves. Palestine, like the United States, is one of the defining issues of their own belief system.

On the issue of democracy, Iran is clearly ahead of Sunni Arab states in terms of political pluralism, popular participation, and accountability of institutions. That said, the recent legislative elections illustrate the fragility of Iran’s embryonic democracy, since many candidates were barred from running by bodies controlled by the conservatives. The results of these elections also show that Iranian leaders are not yet committed to a fully democratic Iran, and this greatly harms the democratization process.

There is a continual opportunity cost to the United States for not developing a more dynamic and effective policy towards Iran, but Americans seem to have lost the ability to understand and define those costs. Meanwhile, Iran is on its own trajectory. It is not nearly as successful a state as some might have hoped but it is a serious country. Its ambitions are not always clear or consistent. It doesn’t always control its own national security instruments and often is a negative force in the region.

Most Iranians probably want a more normal relationship with the United States just as most Americans probably support a form of American leadership that is multilateral in its orientation. But this is passive support; it is the passionate, highly motivated minority who often get its way, even if the majority has a different view.  U.S.-Iran relations will remain in an awkward phase for quite some time.  One should not expect any early success in changing Iran’s calculus on its nuclear weapons, and this could well remain the dominant issue with regard to Iran for the coming years.  Yet some modest society-to-society engagement will keep some links alive. It will never be an easy relationship. There will be enduring tension between our goals globally and Iran’s self-declared destiny to be a regional power.

Iran has a destiny in the region and possibly beyond.  It could develop a role as part of a group of countries that could include Brazil, Nigeria, Turkey, Indonesia, pivotal states who operate at just below the tier of the great powers that have global reach. Iran will almost certainly have more clout in the future in international organizations, will be able to prey on its neighbors, and will be able to achieve some level of local or regional hegemony.

We should try to get to a place where we can define Iran not only in terms of its negatives, which are formidable, but also its promise and its potential. We’ll never return to the partnership of the shah’s days and we should be clear in our minds that that would no longer be desirable. Between that and what we have today there’s lots of room for creative diplomatic work.


[1] When a U.S. oil company, Conoco, sought US government support for a new energy relationship with Iran, the reaction was so strongly negative that it led to new restrictions on trade and sent a chilling signal to the US business community. 

[2] Shaul Bakhash, “The 25th anniversary of Iran’s Islamic Revolution: Looking back and ahead,” Remarks at the Washington Institute for Near East Policy, February 27, 2004   [Available at]

[3] Arthur C. Millspaugh, Americans in Persia (Washington, DC: The Brookings Institution, 1946), 49-50, as cited in James Bill, The Eagle and the Lion (New Haven and London: Yale University Press, 1988).

[4] Secretary of State Madeleine Albright, “American-Iranian Relations,” Remarks before the American-Iranian Council, March 17, 2000

 [available at]

[5] President Bush, “State of the Union 2002”

[available at]

[6] Iran is more than three and a half times the size of Iraq, and its population more than two and a half times larger than Iraq’s.

[7] Anthony Lake, “Confronting Backlash States” Foreign Affairs, March/April 1994

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