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The Islamic Republic of Iran is a revolutionary theocratic state formed in 1979 following the overthrow of the last Shah (monarch), Muhammad Reza Pahlavi. Grand Ayatollah Ruhollah Khomeini perfected the religious philosophy that is the basis of the current Iranian regime. In particular, he established the principle that the only legitimate ruler over a Muslim state is the jurisprudent best qualified to interpret the Qu’ran, the traditions of the Prophet Muhammad (hadith) and of the First Imam, Ali ibn Abi Talib, and the traditional behavior of the early Muslim communities.

The Islamic Republic of Iran

This narrative was written by Christopher Beckmann with contribution from Caitlin Shayda Pendleton.

The Islamic Revolution and Foreign Relations

The 1979 Iranian Revolution overthrew Iran’s authoritarian and Westernizing monarchy and established the Islamic Republic. Ayatollah Ruhollah Khomeini, the revolution’s spiritual leader, became the Islamic Republic’s first Supreme Leader after the American-backed shah fled the country. Khomeini asserted that a high-ranking cleric should have absolute authority over the governance of the Iranian state. Ayatollah Ali Khamenei succeeded Khomeini as Supreme Leader upon Khomeini’s death in 1989. Khamenei maintained Khomeini’s policies of anti-Americanism and still serves as Supreme Leader despite longstanding rumors of poor health.

Iran isolated itself from the international community after the revolution. The U.S. and Iran have not had diplomatic relations since 1980, when revolutionary students held U.S. Embassy personnel hostage in Tehran for 444 days. The 1980-1988 Iran-Iraq War, a brutal and inconclusive war of attrition, further isolated the Islamic Republic. Syria became one of Iran’s only allies during the war and remains an ally today.


  • Politics in the Islamic Republic

    The Islamic Republic’s political system combines representative government with theocracy. The popularly-elected president executes the national budget, appoints ambassadors, and chairs the Supreme National Security Council, which sets Iran’s security and defense policy, including managing the country’s nuclear portfolio. Parliament approves the national budget, ratifies international treaties, and can impeach the president’s ministers.

    The government adheres to Khomeini’s principle of velayat-e faqih, or “guardianship of the jurisprudent,” which limits the power of elected officials by entrusting a cleric to be the country’s top official, the Supreme Leader. The Supreme Leader can veto any legislation or treaty. He has the final say over domestic policies, foreign relations, and the nuclear program. The Supreme Leader, moreover, is commander-in-chief of the armed forces. The elite Quds Force, the paramilitary arm of the Islamic Revolutionary Guards Corps (IRGC) responsible for extraterritorial operations in places like Syria and Iraq, bypasses IRGC leadership and reports directly to the Supreme Leader.

    The Supreme Leader appoints the Guardian Council, which is comprised of twelve jurisprudents and checks the power of Parliament by wielding veto power over all parliamentary legislation. The council also has the power to vet candidates running for president, Parliament, and the Assembly of Experts, the clerical body tasked with selecting the next Supreme Leader. The council’s electoral vetting process has become more thorough throughout the Islamic Republic’s history and has disproportionately targeted reformists.[i]

    [i] Caitlin Shayda Pendleton and Paul Bucala, “Iran’s 2016 elections: The process, the players, and the stakes,” AEI’s Critical Threats Project, January 12, 2016. Available:

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Pragmatic and Reformist Presidencies Make Limited Gains

Although the Supreme Leader has veto power to prevent major policy shifts, Iranian presidents can still impact the country’s domestic and economic policies as well as its international reputation.

Akbar Hashemi Rafsanjani was inaugurated in 1989 as Iran’s first president after constitutional amendments eliminated the rival position of prime minister. His platform of postwar reconstruction encouraged economic privatization and foreign investment. His administration also loosened some socio-cultural restrictions. Rafsanjani was generally committed to outreach to the international community, including an unsuccessful attempt to reach a $1 billion oil agreement with Conoco, an American company.[i] Rafsanjani did not loosen political restrictions, however. A journalist notably accused Rafsanjani of complicity with the assassination of dissidents and reformist intellectuals during his two-term presidency.[ii]

Rafsanjani was nonetheless influential in securing the election of Mohammad Khatami, his former reformist Minister of Culture, as president in 1997 and in 2001. Iranian press and civil society faced fewer restrictions under Khatami’s presidency. Khatami also gained international praise for calling for a “dialogue among civilizations.”[iii] He went so far as to say that an infamous ruling by Khomeini that called for the death of British writer Salman Rushdie was “completely finished.”[iv] Khatami’s reformist agenda was halted by 2004, however, as the Guardian Council vetoed reformist bills and disproportionately disqualified most reformist candidates from running for Parliament.

[i] Muhammad Sahimi, “Rafsanjani: I Wanted to Reestablish Ties with US, But 'Could Not,’” PBS, April 6, 2012.

[ii] Denise Hassanzade Ajiri, “Can a former kingmaker make a comeback in Iran?” Tehran Bureau, January 27, 2016.

[iii] “Transcript of interview with Iranian President Mohammad Khatami,” CNN, January 7, 1998.

[iv] Robin Wright, “Iran's President Signals End of Death Threat for Rushdie,” LA Times, September 23, 1998.

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Reformists are Sidelined from the Political Process

Hardliner Mahmoud Ahmadinejad’s presidency from 2005-2013 transformed Iran’s domestic political scene and international standing through eight years of redistributive economic policies and incendiary rhetoric.[i] Relations between Iran and the international community declined under Ahmadinejad’s antagonistic demeanor. He infuriated world leaders by denying the Holocaust.[ii] With the Supreme Leader’s backing, Ahmadinejad resumed uranium enrichment in 2005 after the Supreme National Security Council agreed to suspend it under reformist President Khatami.[iii]

The regime’s crackdown after the 2009 Green Movement protests further stifled reformists. Millions of protestors challenged Ahmadinejad’s reelection over reformist candidate Mir Hossein Mousavi by claiming that the results were falsified. Khamenei issued a partial recount of votes, but he ultimately claimed the election was legitimate and crushed protests. The Guardian Council and Judiciary have sidelined reformists from the Iranian political system ever since and even placed the Green Movement’s leaders under house arrest, although reformists still maintain some representation in Parliament and in President Hassan Rouhani’s cabinet.

[i] See Charlie Szrom, “Structural Patronage in Iran: Implications of Subsidies Reform for Iran and U.S. Policy,” AEI’s Critical Threats Project, January 28, 2010. and Shaul Bakhash, “The Seven Presidents,” United States Institute of Peace, August 2015. Available: .

[ii] Karl Vick, “Iran’s President Calls Holocaust ‘Myth’ in Latest Assault on Jews,” Washington Post, December 15, 2005. Available:

[iii] Shahram Chubin, “The Politics of Iran’s Nuclear Program,” United States Institute of Peace, August 2015. Available:

Sanctions and Iran’s Nuclear Program

The Islamic Republic has spent most of its existence under sanctions for its support of terrorism, its nuclear and missile programs, and its human rights abuses. The U.S. Department of State lists Iran as the largest state sponsor of terrorism due to its financial and materiel support for groups including Hezbollah.[i]

Iranians elected Hassan Rouhani from the self-styled “moderate” camp as president in 2013 on a platform that centered on lifting the international sanctions that had crippled Iran’s economy. With the Supreme Leader’s blessing, Rouhani’s administration worked with the U.S., the UN, and the EU to form the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, in July 2015. Iran agreed to restrictions on its nuclear program, particularly its uranium and heavy water stockpiles, research and development, and centrifuges.[ii] Iran received substantial sanctions relief in return. Iran will also benefit from the relaxation of certain restrictions on its nuclear and weapons programs throughout the next 25 years. The UN Security Council will lift restrictions on conventional arms sales to Iran by 2020, for example.[iii] How the removal of these restrictions will embolden Iran to increase its regional and military activity remains to be seen. 

[i] Caitlin Shayda Pendleton and Paul Bucala, “Iran’s 2016 elections: The process, the players, and the stakes,” AEI’s Critical Threats Project, January 12, 2016. Available:

[ii] “Joint Comprehensive Plan of Action,” U.S. Department of State, January 17, 2016.

[iii] Quinta Jurecic and Staley Smith, “A Comprehensive Timeline of the Iran Deal,” Lawfare, The Lawfare Institute, July 21, 2015.