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Understanding Iran THE ARTS This PDF document was made available CHILD POLICY from www.rand.org as a public service of CIVIL JUSTICE the RAND Corporation. EDUCATION ENERGY AND ENVIRONMENT Jump down to document6 HEALTH AND HEALTH CARE INTERNATIONAL AFFAIRS The RAND Corporation is a nonprofit NATIONAL SECURITY research organization providing POPULATION AND AGING PUBLIC SAFETY objective analysis and effective SCIENCE AND TECHNOLOGY solutions that address the challenges SUBSTANCE ABUSE facing the public and private sectors TERRORISM AND HOMELAND SECURITY around the world. 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RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND mono- graphs undergo rigorous peer review to ensure high standards for research quality and objectivity. Understanding Iran Jerrold D. Green, Frederic Wehrey, Charles Wolf, Jr. Prepared for the Smith Richardson Foundation NATIONAL SECURITY RESEARCH DIVISION The research described in this report was sponsored by the Smith Richardson Foundation and was conducted under the auspices of the International Security and Defense Policy Center within the RAND National Security Research Division (NSRD). NSRD conducts research and analysis for the Office of the Secretary of Defense, the Joint Staff, the Unified Commands, the defense agencies, the Department of the Navy, the Marine Corps, the U.S. Coast Guard, the U.S. Intelligence Community, allied foreign governments, and foundations. Library of Congress Cataloging-in-Publication Data Green, Jerrold D. Understanding Iran / Jerrold D. Green, Frederic Wehrey, Charles Wolf, Jr. p. cm. ISBN 978-0-8330-4558-4 (pbk. : alk. paper) 1. Iran—Politics and government—1997– 2. Iran—Economic conditions—1997– 3. Iran—Foreign relations—1997– I. Wehrey, Frederic M. II. Wolf, Charles, 1924– III. Rand Corporation. IV. Title. JQ1785.G74 2009 320.955—dc22 2008035190 The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. © Copyright 2009 RAND Corporation All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from RAND. Published 2009 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213-2665 RAND URL: http://www.rand.org To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Preface Th e United States has been working predominantly in the dark with respect to the Islamic Republic of Iran. All interested players, regard- less of their political leanings or underlying motivations, suff er from America’s collective ignorance about this uniquely complex country. Th is ignorance stems from Iran’s denial of sustained physical access to American visitors, but it also stems from America’s lack of access to and insight into the workings of the Iranian system itself, especially its economic system. Th is gap is what the project reported on in this monograph addresses. Th e project’s architects recognized that U.S. policymakers of all perspectives need to understand what motivates Iran and how it works. Fully aware of the analytic challenges that Iran off ers, the proj- ect organizers turned to the Smith Richardson Foundation for assis- tance, with an eye to constructing a user-friendly and readable hand- book that could enable U.S. policymakers to get up to speed on Iran in an effi cient fashion. Th is research was conducted within the International Security and Defense Policy Center (ISDP) of the RAND Corporation’s National Security Research Division (NSRD). NSRD conducts research and analysis for the Offi ce of the Secretary of Defense, the Joint Staff , the Unifi ed Combatant Commands, the defense agencies, the Department of the Navy, the Marine Corps, the U.S. Coast Guard, the U.S. Intel- ligence Community, allied foreign governments, and foundations. For more information on RAND’s International Security and Defense Policy Center, contact the Director, James Dobbins. He can be iii iv Understanding Iran reached by email at [email protected]; by phone at 703-413- 1100, extension 5134; or by mail at the RAND Corporation, 1200 S. Hayes Street, Arlington, VA 22202. More information about RAND is available at www.rand.org. Contents Preface ............................................................................. iii Figures and Tables ...............................................................vii Summary .......................................................................... ix Acknowledgments ............................................................. xvii Abbreviations .................................................................... xix CHAPTER ONE Introduction ....................................................................... 1 Birth of the Project ................................................................. 1 Background ......................................................................... 2 Contents of Th is Document ...................................................... 3 CHAPTER TWO Features of the Iranian System ................................................. 5 Iran’s Political Landscape: Individuals and Institutions ....................... 6 Th e Supreme Leader: Infl uence and Worldview .............................. 7 Th e National Security Establishment and the Rise of the Revolutionary Guards .....................................................10 Th e Iranian Economy: Oil Dependency, Key Actors, and Policies .........15 Oil Export Dependency and Its Pathologies .................................16 Economic Policies and Institutions: Complexity and Redundancy .......21 Disarray and Dysfunction in Economic Policy Execution ................ 23 Th e Elite’s Political Culture: Factionalism and Informality..................25 Factional Dynamics at Work: Th e Nuclear Case Study ................... 28 Iran’s Approach to Its Arab Neighbors: Implications for Iranian Behavior and U.S. Policy ....................................................33 v vi Understanding Iran Iran’s Outreach to Arab Publics .............................................. 34 Iran and Anti-Shiism .......................................................... 36 Iran’s Negotiating Style ...........................................................39 CHAPTER THREE Conclusion: Iran Is Unlike Other Countries but Hardly Beyond Understanding ..............................................................47 APPENDIX A Workshop Agenda ...............................................................49 APPENDIX B Workshop Papers ................................................................51 Decisionmaking for National Security: Th e Nuclear Case, Shahram Chubin .........................................................................52 Negotiating with Iran: A Case Study, James Dobbins ........................ 66 Iran’s Defense Establishment, Anoush Ehteshami ..............................71 Negotiating with Iran, Jerrold D. Green ........................................79 Understanding Ayatollah Khamenei: Th e Leader’s Th oughts on Israel, the U.S., and the Nuclear Program, Karim Sadjadpour ................ 87 Th e Politics of Factionalism in Iran, Amin Saikal ............................ 96 Economic Decisionmaking in Iran, Koichiro Tanaka ....................... 105 Iran in the Arab Sphere: Debating Legitimacy, Sovereignty, and Regional Order, Fred Wehrey ............................................. 113 Iran’s Oil Sector: Questions, Puzzles, Explanations, Charles Wolf, Jr. .... 123 APPENDIX C Biographies of Workshop Participants .................................... 129 References ....................................................................... 141 Figures and Tables Figures 2.1. Major Institutions of the Iranian Defense Establishment ........11 2.2. Flow of Funds: Iranian National Budget, 2007 ...................18 2.3. Flow of Funds: Projected Government Revenue, 2007 ...........19 2.4. Flow of Funds: Projected Government Spending, 2007 ..........19 Tables 2.1. Budgetary Funds: Ministry Sources and Recipients ............. 20 vii Summary Over the years, there have been numerous eff orts
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