Assorted Thoughts on Iran

Here’s a story in poor timing. I’ve spent the last three years writing a dissertation on bargaining over nuclear weapons, often with Iran as substantive motivation and focus. On Saturday night, my best friend from high school was getting married. Also on Saturday night, the United States and Iran announced a preliminary agreement over Iran’s nuclear program. I didn’t even know until the next morning, and I have been playing catch up ever since.

That said, I have encountered a lot of discussion on social media about the deal. Having spent all those years analyzing the credibility of nuclear agreements, I wanted to make five quick comments about the Iranian deal and such deals in general:

1) Bargaining can work.
A common misconception about bargaining over weapons is that any deal is inherently incredible. The theory is as follows. To buy off a proliferator, the rival needs to offer concessions. But those concessions are hard to retract if the proliferator is not compliant. Thus, the proliferator can take the concessions and build weapons anyway. In turn, because offering concessions has no impact on the proliferator’s decision, the rival should not attempt a bargain.

Although I believed this intuition was true when I began my research project on bargaining over proliferation, it turns out this is wrong. Bargaining over nuclear weapons works. The reason is that a proliferator will ultimately receive some amount of concessions. The rival can just offer most of those concessions off the bat. At that point, the proliferator has no incentive to develop nuclear weapons–if it did, it wouldn’t get much more than it is already getting, but it will have to pay the costs. So bargaining can work.

2) Iran is getting an awful deal (so far).
Broadly, rivals can use one of two nonproliferation strategies. First, they can use “carrots” in the form of the concessions mentioned above. Second, they can use “sticks” like sanctions and preventive war.

Although the announced deal is only preliminary, Iran isn’t getting any carrots. The deal essentially places the United States and Iran at the status quo ex ante: the United States is lifting most of its sanctions (with some oil embargoes remaining), while Iran is agreeing to stricter weapons inspections. As the narrative goes, the “stick” has beaten Iran into submission.

If we are basically back where we started, what was the point of the last ten years of proliferation? One ad hoc story is that Iran is worried about preventive war. But why hasn’t Iran been worried about preventive war in the last ten years? Israel has consistently called for invasion, and Iran has persistently called its bluff. Meanwhile, despite Netanyahu’s desperate pleas, Obama has yet to campaign for a military option. If anything, American reluctance to intervene in Syria has signaled general war exhaustion. So preventive war does not seem to be the answer.

The other ad hoc story is that sanctions are crippling Iran’s economy. But this by itself is unsatisfying–policymakers in Iran must have foreseen that the United States would sanction Iran for noncompliance. Yet Tehran marched forward anyway–the regime must have calculated that the costs of nuclear weapons (both from sanctions and the R&D costs) were worth the end product. One way to resolve this is to assume that the United States had private information on the effectiveness of sanctions–Iran grossly underestimated the effectiveness of sanctions, while the U.S. knew they would work to perfection. If you think that sanctions were wildly more effective than anticipated, then you could reasonably expect the announced deal to be credible, and Iran will forgo proliferation so as to avoid more sanctions.

If you are skeptical that this is the case–and I am–then the United States will need to offer carrots to induce Iran’s compliance. In the absence of credible and effective “stick” options, nonproliferation agreements only work when potential proliferators receive good deals. The announced deal could not be much further from that, as Iran is getting nothing more than what it would have received had it not walked down this road at all. Perhaps these carrots will come in the second stages of negotiations. For now, however, if you think that the sanctions were not sufficiently effective, then this deal will not work until the United States gets out its checkbook.

3) Carrots must be permanent carrots.
If carrots are a part of some eventual grand bargain, they won’t come cheap. Washington won’t just be able to write Iran a one-time check for $10 billion in aid and expect the problem to go away. Rather, the U.S. will have to keep offering Iran that amount of aid year in and year out. In contrast, if concessions are a one-time gift, Iran has no incentive to maintain the deal going forward. That doesn’t mean that the United States shouldn’t pursue a deal. After all, deals are credible when structured correctly. Just don’t expect a comprehensive agreement to be on the cheap.

Along these same lines, the United States needs to make sure it will credibly give those carrots year in and year out. If Iran expects that a deal will suddenly stop at America’s whimsy–perhaps because of a new, hardline president–the deal will fail.

4) Inspections aren’t pointless.
Hardliners seem to have a mantra that inspections are useless since they can never be all-encompassing. They miss the point. Inspections aren’t always designed to create perfect information. Rather, inspections make it costlier to proliferate, since inspectors force proliferators to develop nuclear weapons via more inefficient means. Greater proliferation costs open up bargaining ranges, reducing the probability of preventive war or further investment in nuclear weapons.

Note, however, that inspections are only an intermediary step. Inspections don’t convince states to completely stop proliferation activities–that is what the carrots are for. Put bluntly, inspections without carrots won’t do much good.

5) War bargaining =/= arms bargaining.
From an IR theorist’s standpoint, it is tempting to use the bargaining model of war as a framework for nuclear negotiations. Yes, there are a number of similarities–bargaining, shadow of war, information issues, commitment problems. But nuclear weapons are not a bargaining object in themselves. No one in Tehran will look at the first Iranian nuclear weapon and think “SHINY!” Rather, nuclear weapons are an inefficient means to an end. Fearon 1995 is a good tool to start with, but we need a larger toolbox to really understand the dynamics of bargaining over proliferation.

Yes, that was a shameless plug for my dissertation.

___________________

The bottom line here is that negotiations aren’t nearly over. The United States will likely have to make real concessions to Iran to induce Tehran to permanently end its program. Anything short of that will lead to more sanctions, preventive war, or nuclear proliferation.

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One response to “Assorted Thoughts on Iran

  1. A point on your second argument, where you make the assumption “Iran grossly underestimated the effectiveness of sanctions”, and further mention that you are skeptical that this is the case, I think it really is the case. let me explain. (Before I start, I lived in Iran until 10 years ago, still follow the news, and read and speak Persian fluently, so I tend to look at the arguments and news from both sides).

    The Iranian system of governance is not a one-man-show dictatorship. It is not a complete democracy in the strictest terms either, instead being a hybrid. In this system the leader gets the final say, but he typically reserves the role of an arbiter between the different factions. The president has the executive power, he appoints the cabinet and basically runs the country. Why is this important? Because the previous president, the infamous Mahmoud Ahmadinejad, was a special case. He was a populist, that played dirty politics by lying and thwarting facts whenever it suited him. He didn’t start from the conservative religious base, which the leader belongs to, nevertheless he played the religion card as a means to bait the conservatives to “adopt” him, and they fell for it sink and line. In his first term he got elected by promising impossible things to the masses, and of course using the religion card. One sign of this was when he gave a speech at the UN, where he kept on talking about religion and depicting grandeur visions of a just world, etc. (http://www.un.org/webcast/ga/60/statements/iran050917eng.pdf), and he kept on the same prerogative for the next 8 years. This speech was in fact aimed at his popular base of support in Iran, saying that “look, we have got to a point that we can lecture the world because our message is so just and divine”. Obviously after 3 years in office people started to see what’s underneath his methods and there was a popular push to elect a different president, even though the conservative religious faction “wanted” to believe him. He had lost the popular vote for his second term election, but he committed election fraud (Still alleged at this point, but with much evidence: http://en.wikipedia.org/wiki/Results_of_the_Iranian_presidential_election,_2009#Analysis), which resulted in the mass protests of 2009. The leader sided with him because he didn’t like the idea of capitulating to the street protests, and perhaps he still trusted Ahmadinejad, and as a result the security establishment forcefully quelled the protests. This turned out to be a mistake, as it became very costly. But, he made the decision based on information from the security apparatus, and believed the costs will be minimal. Of course the president of Iran runs the security ministry, so again it was Ahmadinjead which gave the wrong estimated to the leader. Ahmadinejad’s lies and dirty politics became quite apparent as a result though, and in his last two years of office the conservative faction became his main critic. For the 2013 presidential elections, all of the 8 candidates were talking against him, and even the leader had to show up in TV and pledge to a healthy election and ask Iranians to go vote, even if they don’t support the regime and for the sake of the country, a very unprecedented move (http://www.newrepublic.com/article/113472/iran-elections-2013-candidates-withdraw-complicating-khomeneis-plan). Now at 3 months past Ahmadinjead’s presidency, there are a couple of law suits against him in the courts. Nowadays there are widespread reports of doctored numbers and statistics (a.k.a. lies) that he had used during his administration, published by the current government of president Rouhani. For example, he officially reported 7 million new jobs during his 8 years, while the real number was more like 600K in the best case, and possibly quarter that number. Or he reported 63K kilometers of new road construction, while the real number turned out to be one fourth. (http://www.csmonitor.com/World/Middle-East/2013/0802/After-8-defiant-years-Ahmadinejad-leaves-Iran-isolated-and-cash-strapped)

    So, why did I write all this lengthy introduction? Because the leader and his circle of trustees at the beginning of Ahmadinejad’s first term and up until his reelection, trusted him. Ahmadinejad in turn gave him a lopsided view of the Iranian economy, the costs of the sanctions and their possible impact (Ahmadinejad called the UN sanctions “a bunch of torn papers”), the cost of the nuclear program, and even the cost of outrageous technological programs (e.g. he started an 8 year manned space exploration program and said it is not going to cost much, while yesterday there was a report from the new administration of Rouhani, conducted by two separated universities, that such a program would cost at least $10B over a 15 year period, and subsequently canceling the program). In other words, I believe that your assumption in point number 2 is valid, and the whole establishment made a mistake in estimating the cost of the sanctions.

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