POLITICAL ECONOMY OF POLITICAL POWER OF THE ISLAMIC REGIME IN IRAN

Siavash Abghari, Morehouse College

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Abstract

The Iranian people have struggled for a democratic system of government since early 20^th century and failed in every attempt. In the popular uprising of late 1970s, the Islamic clerics gained hegemony and eventually established a government with an Islamic ideology. In this paper a political power production function, with repression and loyalty as factor inputs are used to explain how the dictatorial regime obtains and maintains political power. The process of depriving the Islamic regime from its power without war, and moving toward establishing a democratic system of government in Iran is explained. The role of democratic governments and international agencies in this process is discussed.

I. Introduction:

Democracy as a system of government is proclaimed to be superior to dictatorship. Since the collapse of the system in the Soviet Union and Eastern European countries, people in all countries are converging on the ideal of democracy, to improve economic performance of their country as well as human and civil rights of the people. For more than a century, the people of Iran have been struggling to establish a democratic system of government. The Constitutional Revolution of 1907 in Iran tried to replace absolute monarchial regime with constitutional monarchy and parliamentary democracy, but had limited success and dictatorial monarchy was imposed. In early 1950s a conflict emerged between nationalists, led by Prime Minister Mossaddegh and monarchists led by Shah himself over the extent of power and control exercised by the Shah and royal family in the state affair and nationalization of the oil. In 1953 Mossaddegh was removed from power and arrested by the American CIA engineered coup. Mossaddegh was overthrown, because he had nationalized British property, and Iran with long border with the Soviet Union with an active Communist party was considered a great danger that it would fall to communism (Kinzer, 2003). With harsh repressive measures, the Shah was reinstalled. Soon, the Shah, through repression, established an absolute monarchy and controlled all the affairs of the country (Parsa, 2000).

The popular uprising against the Shah’s dictatorship in late 1970s led to the Revolution of 1979. Although, there were many political organizations and groups with different ideologies and political orientations during the revolutionary process, the Islamic clerics gained hegemony and hijacked the ideals of revolution: liberty, justice and democracy; and turned the rebellion into an Islamic Revolution. The cleric eliminated other ideologies and tendencies in the system during the early years of the revolution and imposed a more repressive Islamic government on the people and the country, which has resulted in great economic and human loss and suffering since the Revolution of 1979.

This paper identifies and defines the political system in Iran without going through the historical analysis of how the regime established itself. From a political economy point of view, the Supreme Leader uses the scarce economic resources to repress the opposition, buy political loyalty, and maintain political power. This paper uses a political power production function model to establish the conditions under which the Islamic regime in Iran obtains power and behavior. The paper also shows the process by which the regime can be deprived of its power and move toward establishing a democratic system of government in Iran; using property rights theory and human rights theory approach. These theories are used to compare different political systems in terms of their capacity to allocate power as well as to promote economic growth and efficiency.

II. The Dictatorial Islamic Regime in Iran

In the democratic societies, power is formally delegated to governments through free elections. Governments, in turn, use this power to affect the economy by regulation of industries and providing public goods. Modern property rights theory allocates capital resources in the economy and human rights theory allocates political power. Property rights theory indicates that two conditions are necessary for private bargaining to allocate resources efficiently (Coase, 1960):

1. Property rights should be well defined; and

2. Property rights should be transferable at low cost.

Coase theory implies that resources will be allocated efficiently by private bargaining. These property rights are: the rights to possess, use, develop, improve, transfer, consume, deplete, destroy, sell, donate, transform, mortgage, lease, loan, etc. Transferability of property would maximize the market value of these assets and the people will own assets, which is most valuable to them.

In democratic societies, political systems are based on human rights, while the capitalist mode of production is based on property rights. Democracy makes power transferable just as capitalism makes the ownership of capital assets transferable. The economic advantage of the election in a democratic system of government is that it allows transfer of power at a relatively low cost. In dictatorial systems which do not allow free and fair elections, the way to transfer power and dismiss the regime is by costly means such as: revolutions, insurrections, coups, or wars (e.g. the invasion of the Iraq to remove Saddam Hussein from power). Compared to these costly means, democratic elections based on inalienable human rights provide, a formal and consensual procedure to decide on the allocation of political power. In a democracy, government derives its legitimacy from the people and thus is the only regime that makes it possible for the ruled to dismiss a given government without bloodshed. Because the costs of transferring power are low, it is at least possible that power will flow into the hands where it is most valuable (Wintrobe, 2001). In a functioning democratic system, the election mechanism consists of the following:

1. There is a contest for the principal positions of political power and voters decide on a winner. This free election legitimizes the transfer of power to the winning group as the representative of the people;

2. The election is competitive; except for criminals, there are no barrier to entry into politics;

3. Elections take place on the basis of inalienable human rights. Absolute and unconditional freedom to express, to organize, to vote and to participate in politics in other ways without fear of reprisal from any individual or group;

4. Presence of an independent judiciary to protect human rights of the people. Politicians and government officials must be constrained in their actions by the rule of law, so that, no individual or group of people in the government can take reprisal against any citizen or group of citizens;

5. Protection of the citizens from political terror and unjustified imprisonment; and

6. Free and accessible press as a mean by which people can express their dissatisfaction with public policies, and communicate with others in the society.

None of the above conditions for free and democratic elections exist in the Islamic Republic of Iran. The constitutional law of the Islamic Republic of Iran defines the system of government as Islamic. Believing in God and submission to Him is the rule, and the laws of the country must be representing the God’s will, thus fatalism. Khomeini, after the Revolution of the 1979, argued that religious judges have the “same authority” as the prophet, and disobedience to the religious judges was disobedience to God (Abrahamian, 1993). Political structure in Iran concentrates power in the hands of one person, the Supreme religious leader. Articles 4-5 indicate that all civil, criminal, financial, cultural, political, administrative, and military laws and regulations must be based on Islamic principles. According to article 57 of the Constitution, the supreme leader has the authority over legislative, executive, and judicial branches of the government. He determines and controls: (a) principal policies of the Islamic republic, (b) he is the commander in chief of the armed forces, (c) declare war and peace, (d) appoints chief justice, (e) appoint and remove members of the Guardian Council, (f) appoint the head of TV and Radio organization, (g) appoints joint chief of staff, (h) appoints commander of revolutionary Guard, (I) appoints Commander of Army and Police, (j) and may remove the president from office. Also, in the Islamic Republic, state owns and has monopoly power over heavy industries, foreign trade, all minerals, banking, insurance, electric power, radio and TV, postal services, and railroad in the country (Mansour, 1998). The private sector in Iran is crowded out and plays an insignificant role in the economy.

Friedrich and Brzezinski define totalitarianism as a political system with these characteristics: a coercive ideology, country led by a single person, a terrorist police force, monopoly of mass communications, monopoly of armaments, and state control of the economy (Friedrich and Brzezinski 1965). The Islamic regime in Iran possesses all of the characteristics of the totalitarian regime, which has tried to dominate every sphere of life of each individual in the country. In the following sections, an attempt is made to analyze the process of producing and maintaining political power by the regime, and how the democratic opposition may use this analysis to disarm the regime of its political power and move toward establishing a democratic government in the country. The role and responsibility of Western democracies in support of the Iranian people in their struggle to establish a democratic system of government particularly with the rise of international terrorism is also discussed.

III. Political Power Production Function Model

As previously mentioned, the political system of governance in Iran is authoritarian and dictatorial. The regime uses loyalty and repressive instruments in its political power production function to build and maintain political power. To repress and eliminate political opposition, the regime allocates economic resources to produce and implement repressive laws, monitor the activities of individuals, and punish the offenders. Also, in order to create an environment of fear and terror, the regime’s agents kidnap, torture, kill, assassinate and hung the suspected opposition. Furthermore, the regime buys support from individuals by creating and distributing political rents. The rent seekers subsequently become loyal supporters of the regime. The resources that are used by the regime to repress the population and create loyal supporters are wasteful expenditures that represent deadweight loss to the society.

A political power production function can be developed that shows the relationship between repression (R) and loyalty (L) as factor inputs and political power (P) as output. The interrelationships between repression and loyalty is very complex, but their levels affect, as well as psychological factor, organizational strength of the opposition, international diplomacy and tolerance of the Western democracies. Also, the level of repression affects supply of loyalty. A production function in economics is used to develop the following political power production function equation to explore possible interrelations between the two inputs, loyalty and repression in producing political power by the dictatorial regime (Nicholson, 1998):

(1) P = f (L, R), where P stands for political power, L represent loyalty and R is repression.

Where

P_L> 0, P_R> 0, P_LR> 0, P_LL< 0, P_RR< 0

P_L> 0 , P_R> 0 , are marginal product of loyalty and repression as factor inputs which are positive, meaning, use of additional unit of these factors will have a positive impact on political power production. P_LR> 0 is marginal product of loyalty and repression, using additional units of them jointly in political power production, which is positive. P_LL< 0 and P_RR< 0 are marginal product of successive use of loyalty and repression factors alone, which are negative. This indicates that continued use of any instrument loyalty or repression alone leads to law of diminishing returns in production of political power. Therefore, as the regime increases the level of repression, it must buy loyalty, by distributing more political rent among the supporters in order to make the repression more effective. Also, it should be indicated that, with increased level of repression, people in the opposition, become hateful of the regime, and when hate increases, the autocratic Supreme religious leader loses loyalty because the risk of being associated with the autocratic leader will increase. Thus, to maintain support and loyalty the leader has to reward supporters with more political rent. In other words the supporters want to be rewarded for the additional risk. It should be indicated that this loyalty buying of the regime and rent seeking behavior of the individuals has lead to wide spread corruption in the country. Also, to maximize power over the people, the Islamic regime uses instruments of mass control, such as banning the free press and using state-owned mass media to manipulate the public opinion. The supply of loyalty to the autocratic leader will also depend on other variables. For example, citizens, political groups and political factions supply loyalty because they expect to receive in return some portion of the political gains from the exchange. This rent to suppliers of loyalty can be represented as a “price” received per unit of loyalty supplied (Lp). Also, the supply of loyalty depends on the economic performance of the regime (PE). Improved economic performance increases the regime’s legitimacy, and means that the regime has more financial resources at its disposal to repress the opposition, as well as to buy more loyalty. The supply of loyalty function can be written as:

(2) L^s = f ( Lp_, R, PE)

Where, L^s represents supply of loyalty, Lp is price of loyalty, R represents repression, and PE represents Economic Performance.

Given the economic performance (PE), the autocratic leader would choose combinations of R (Repression) and L (Loyalty) to maximize political power or maintain the hold on power subject to the constraint posed by the supply of loyalty. The Lagrangian function for the maximization of the political power production function, equation (1), subject to the supply of loyalty function expressed by equation (2) can then be written as equation (3) below:

(3) Max P = f (L, R) + λ [L^s – f (Lp, R, PE)]

Maximization of the constrained political power production function, equation (3), is accomplished by setting the partial derivatives of the Lagrangian function taken with respect to independent variables equal to zero, and then solving the resultant system of equations. the solution simply is:

(4) P_{R ⁄} P_{L =} ∂R ⁄ ∂L

Equation (4) shows that if the supply of loyalty is the only constraint, the slope of the supply curve ∂R ⁄ ∂L must be equal to slope of iso-power line P_{R ⁄} P_L at the optimum point. Iso-power, derived from iso, meaning “equal” and power meaning political power, denotes a curve that represents all the different combinations of inputs, in this case, repression and loyalty, when combined produce a specified political power. The slope of the tangent to a point on an iso-power is the rate at which repression (R) must be substituted for loyalty (L) in order to maintain the corresponding political power level. The shape of the iso-power reveals a great deal about the substitutability of the input factors, that is, the ability to substitute one input for another in the political power production processes. In other words, repression and loyalty can be traded for each other, while holding the political power constant. One implication of this model is that in authoritarian Islamic regime, repression is carried to the point at which at the margin, an increase in repression reduces the supply of loyalty. Thus, more repression increases the level of fear among the people and at the same time makes them more hateful of the regime. As the level of hate increases this makes the population more resistant which in turn augments the repression requirement to keep the population in line. More fear lowers the repression requirement for maintaining power (Spagat, 2002). A rational dictator will never use a combination of repression and loyalty, as it results in a negative contribution for one of the inputs at the margin in the production of political power.

IV. Application of the Model in the Islamic Republic of Iran

The autocratic Supreme Religious Leader as the representative of the Allah’s sovereignty on the earth uses repression and loyalty instruments to maximize political power over the population. For producing and maintaining the political power over population, the regime represses the opposition and buys political loyalty from supporters. From political economy’s view point, the central and basic question is not the maximum political power by the Supreme Leader, but the importance of the nature of the constraints and limiting factors in political power production. From the Supreme Leader point of view, the most important factor is the loyalty of the population. What constrains the Supreme Leader in the maximization of power is the economic resource under his control. The regime, for producing and maintaining political power, represses the opposition and buys political loyalty, by using up economic resources. In Iran, oil and gas, other minerals, and large industries are state owned. More than 80 percent of the economy is under state control. There are also huge economic foundations that are separate and independent from government, with monopoly power under direct control of the Supreme Leader. Therefore, he has access to huge economic resources to play with, as it pleases him.

From the regime’s point of view, the most important and critical factors in its political power are the support and loyalty of the people. As long as the regime is having the support of the masses, the despotic leader can maintain his political power and control, with more repression of the opposition and non-supporters. If the regime enjoys the continued and unconditional support of the masses, the outcome will be the total suppression and elimination of the opposition. This has been the goal of the Islamic regime since its inception -the absolute control over all aspect of the individual’s life. In earlier years after the revolution, Khomeini had the support of the masses due to their religious belief and revolutionary fervor, and it was easier for the regime to repress and eliminate opposition in order to centralize political power and interfere in individual’s life by installation of Sharia-based Islamic law. Khomeni and his disciples used the hostage crisis to eliminate opposition and consolidate political power and called it the “second revolution” (Ashraf, 1994).

The second wave of mass elimination of opposition happened in the summer of 1988, after Khomeini accepted the United Nations resolution 598 to end Iran-Iraq war. He took advantage of the domestic and international political environment which was created right after ending the war with Iraq, and secretly ordered the mass murder and execution of tens of thousands of political prisoners, just to reestablish his credential. The victims were buried in mass graves in different cities without families and relatives knowing about their loved ones burial sites (Ghaffari, 1999). As people became more aware of the nature of Khomeini’s Islamic Republic, they resisted the interference in their personal life and the Iranian society has never been as disgruntled and displeased with its leadership as today. Thus, today the regime that was created in the name of Islam has alienated young people from Islam today.

Theoretically, there is a conflict between maximizing the political power of the regime with total political repression and ignoring the loyalty factor. This will become apparent as the relationship between repression and loyalty is discussed below. As mentioned, autocratic rulers use two instruments to produce and maintain political power over the population of the country. These are:

1. Repression: To eliminate political opposition, the Islamic regime designates the opposition’s political activity as illegal and represses it. The repression of the opposition requires allocation of economic resources in order to pass repressive laws; establish revolutionary courts, which have been in operation in the last twenty six years since the inception of the regime; building more prisons and secret detention centers; employing special police and security force; and hire vigilant groups and tugs to attack and kill people and so on. According to June 2004 report of the Human Rights Watch the Islamic regime judiciary is the center of the human rights violations and a small group of judges accountable to the Supreme Leader has shut down public dissent through torture, indefinite solitary confinement and denial of basic due process rights to all political prisoners. This report indicates that “The authorities have largely succeeded in their campaign to send a message to the broader public that the costs of voicing peaceful political criticism are unbearably high”. The regime’s judiciary system is part of the repression apparatus rather than protecting the rights of citizens. The Islamic Republic is the only regime in the world that eliminated the opposition by calling them "the corrupt on the earth and the enemy of the God”, and their elimination is a God given order. The Islamic regime is one of the most repressive in the world today as documented by human rights organizations. According to July 2004 report of the International Federation for Human Rights, Islamic Republic is ranked 160^th. Out of 166 countries in term of freedom of expression.

2. Loyalty: The autocratic Supreme leader, by distributing political rent and creating rent opportunity among a portion of the population, buys their loyalty and support. The regime’s top officials and bureaucrats consistently focus on their political survival, thus always ensure adequate political support from social groups. The dominant strategy they use is material advancement in return for support and political loyalty. Politicians and bureaucrats have turned the institutional arrangement of the country into instruments for their own political purposes. This also explains why they oppose changes while maintaining the status quo. Also, This has lead to wide spread corruption and economic mismanagement which has resulted in high annual inflation, high unemployment, brain drain and decline in economic growth and per capita national income (Abghari, 2004).

Political rent donors themselves are rent seekers at a higher decision-making level. According to Economist Intelligence report in early 2002, a corruption case was exposed and Shahram Jazayeri, a 29 year old business man, confessed he has given money to as many as 60 reformist deputies, including more than $500,000 to the brother of the Supreme leader who is a reformist deputy, and to many government officials and clerics including the Supreme leader office and $700,000 to President Khatami. In fact, all the 500 or so mullahs with political positions in the Islamic government are stockholders in the same corporations or serve on the board of the foundations established by the regime.

The government, by owning oil, natural gas, other minerals and the major industries, as well as controlling about 80 percent of the economy is the biggest contractor, buyer and employer. There are several Foundations which are involved in all line of business and trade that are not accountable to any one but the Supreme leader. The Foundation for the Dispossessed, for example, controls assets worth of $80 billion and is Iran’s second biggest corporation after the National Iranian Oil Company. The foundation owns factories, banks, hotels and properties in Iran and foreign countries. It has purchased interest in 80 foreign companies. About 25 percent of banking business in Dubai is owned by this foundation. The foundation never publishes its accounts and reports only to the Supreme Leader. The second largest foundation is Imam Reza Foundation. By some estimates, the foundations under the control of Supreme Leader control about 70 percent of the national economy outside agriculture and state-owned industries (Taheri, 2004). These foundations emerged after the revolution when the Islamic regime seized the assets of the Shah family, the rich people and individuals closely associated with the monarchy.

In early 1990s, the government launched privatization program of some of the state-owned enterprises. Often this has meant the transfer of ownership to these foundations, top politicians and mullahs and their family members and associates who actively campaign for the regime (Abghari, 2003). Senior clergies and close associates, including Supreme Leader and former president Rafsanjani, are the major stockholders of more than 100 companies. The foreign trade is monopoly of the government, and regime is granting trade licenses to influential people in government and their associates as political rent. Trade with much of Asia, specially Japan and China, and much of the foreign investment deals in Iranian oil and gas is under Rafsanjani control. In September 2003, it was revealed by “Dagens Naeringsliv”, Norway’s daily newspaper that Stat Oil, the Norway’s state-owned Oil Company, has given 15.5 million-dollar to Rafsanjani’s son for obtaining oil contract in Iran.

The regime not only uses financial resources of the country to buy loyalty domestically, also, gives special discounts in oil exports to foreign politicians and friends to buy their support in international diplomacy. Regime by granting economic concessions to Russia, China and European countries is obtaining international support and legitimacy to advance its political agenda.

The Islamic regime has developed a network of loyalty in the country, that is estimated to be about 2 million people. These supporters are offered low interest loans to buy houses and set up businesses, priority in obtaining business licenses, admission to the universities, and pilgrimage to Mecca and other shrines. There are about 20,000 theology students in seminaries that receive stipends from the regime. The regime very often pays the loyalists’ cost of hospitalization, weddings and vacations at state-owned resorts and so on. Also, the regime is buying loyalty through network of mosques, and 400 Friday prayer leaders throughout the country (Taheri, 2004). These days that the price of oil in international market has risen to about $60 per barrel, the regime has more financial resources to buy more loyalty by providing more subsidies and in kind give a ways to loyal supporters mentioned above. Consequently, we may observe a new wave of repression in the country.

Iran has emerged from the era of Western imperialism as a rentier state and the Islamic regime uses the state structure, including the parliament, to adapt and implement policies that are decided by a small group of mullahs and their advisors in secrecy, without being held accountable to the people. This in turn has affected the character of social classes and their political participation. The dichotomy is an elitist Islamist, above a dependent citizenry. According to 2002 Iran Statistical Yearbook, about 56 percent of working people in 1998/1997 were employed by government, excluding the number of people working for the Ministry of Information, Defense Ministry, Armed Forces, Police and Security forces and people working in companies affiliated with these government agencies. Considering the size of these parallel security and police forces and these government agencies in the country, the private sector in Iran’s economy is insignificant. Majority of the working people depend on government for their livelihood and are scared of criticizing government policies. According to United Nations report of January 2004, “the climate of fear induced by the systematic repression of people expressing critical views against the authorized political and religious doctrine and the functioning of the institutions coupled with the severe and disproportionate sentences imposed lead to self-censorship on the part of many journalists, intellectuals, politicians, students and the population at large, thus in effect impeding freedom of expression”.

The Islamic Republic, in addition to Information ministry agents and spies, mandated that every public or parastatal economic organization has to have a clergy on its board, thus, every ministry, government agency, and university have an Islamic committee. All trade unions are run by the Islamic workers’ council in order to control the employees. These employees are silenced, for the fear of losing their job, if they criticize the ruling clergy or express any opposition toward their policy. These support and loyalty-buying activities by the regime are consuming another major part of the countries economic resources. Therefore, the regime continues its reign on power has to decide between these two determining factors, as well as the amount of the economic resources allocated between them.

The relationship and interaction between these two factors, namely repression and loyalty, as the two determining factor in political power, are complicated and interdependent. The level and extent of the repression of the opposition are influencing the loyalty level of the regime supporters. For example, as the regime become more repressive, repressions becomes less effective, and at the same time supporters of the regime require and demand more financial rewards for their loyalty. Analyzing the nature and mechanism of the authoritarian Islamic regime from political economy’s view point, will help us to understand the allocation of the economic resources between the above two factors and the inter relation in political power production. This understanding can help the democratic and secular opposition in their struggle against the regime, in unraveling the regime from her political power base. The level of the political repression is affecting the political loyalty to the regime. As the regime increases the political repression of the opposition, in order to produce and maintain its political power, the additional repression will diminish its initial effectiveness. In other words and in economic terms, marginal product of the repression will decline. Nevertheless, if there is a decline in fear from repression, expect big repression reoccurs as the regime reestablishes its credentials. That is why, after a period of harsh repression and control, it is observed that the regime lowers its level of repression in order to make the next repressive action more effective. Nonetheless, with the increased level of the repression, the level of the political loyalty among the regime supporters diminishes. This is because, the regime realizes that, with increase in repression, people become more hateful of the regime, and the regime’s supporters are exposed to more risk for their political affiliation and loyalty.

The level of political loyalty and repression to the Supreme Leader depends on two other variables. The first is the price of the loyalty. Political parties and groups which are loyal supporters of the regime want and demand in return participation in the political power and share in economic benefits. The supply of loyalty has direct and positive relationship with these economic benefits or rent, which are called, the price of loyalty. Increasing this price increases the supply of the loyalty. The second factor is the regime’s economic performance. If Iran’s economy experiences more economic growth and improved performance, the regime claims the credit which improves its legitimacy. Also, the improved economy means that the regime has more financial resources available to repress the opposition, which increases the regime’s political power. The added repression resulting from improved economic performance increases the risk of being associated and loyal to the regime. The supporters of the regime then, for continuation of their loyalty, want to be rewarded for this additional risk, thus they demand more financial reward form the autocratic Supreme religious leader. This helps us to understand the factional politics within the Islamic regime, between the so-called reformist faction and the conservatives.

In 1996-1997 presidential election, Khatami ran for the position. It should be noted that election in Iran is not free. There is a Guardian Council which its members are selected directly and indirectly by the Supreme leader. This Guardian Council decides who is qualified to run for presidency and the Parliament. Only those who have shown their dedication to the regime and believe in Supreme Leader, in Islamic term known as Velayate faghih, and the Constitution of the Islamic Republic, may run for these positions. In 1996/1997 election, voters supported Khatami because he was aware of the public discontent and promised reform. The Supreme religious leader favored the other candidate. Nevertheless, people supported Khatami to express their opposition to the Velayate faghih and hoped for reform. Khatami’s presidency created an environment of hope and optimism for reform in Islamic regime. As president, he made promises and asked people to stay with him patiently. He wanted to make people especially young, believe that he will change things. He never followed his promises, but the regime could draw out and identify the opposition. With this strategy and 22 million votes for Khatami and his “dialog of cultures” campaign, the regime was able to gain legitimacy, particularly with the western countries. With this gain, and now identified opposition, a new wave of repression started. The autocratic Supreme leader, without this strategy, lacked the power to impose his will on the Iranian people, with huge political risk for the regime associated with both “civil” and “uncivil” warfare. After Khatami was elected, torturing and murdering political activists, students, writers and journalists continuously have increased. Mr. Daryush Forouhar, the general secretary of the Iran’s Mellat Party, and his wife were murdered by the Ministry of Intelligence agents, in his house in Tehran. In July 2003, Zahra Kazemi the Iranian-Canadian photo journalist was murdered by Public Prosecutor of Tehran and his associates, while in detention. The regime has been also very active in extending its reign of terror beyond the Iran’s boarders by murdering Iranian political leaders and activists in Diaspora. By murdering Dr. Shapour Bakhtiar, the last Prime Minister of the Shah’s regime in Paris; Dr. Ghassemlou, the secretary general of the Kurdish Democratic Party of Iran and his associates in Germany; and about fifty other political activists outside Iran, the regime has tried to create an environment of fear and terror outside the country, too.

Khatami’s first term(1997-2001) coincided with conservative faction domination of the parliament. He claimed that his inability to make changes was due to this domination and people should vote for reformist deputies. In his second term, with reformist deputies in majority, and then, executive and legislative in the hand of reformists, they passed legislation to redistribute and shift political power within the system and increase power of the president. This act was vetoed by the Guardian Council, which its members are appointed by the Supreme leader. From political economy’s viewpoint interaction between the two factions of the regime during Khatami’s presidency 1997 to 2005, needs special attention. During this time period, the so-called reformist faction created and capitalized on an image of change and reform. People, hungry for real reform, supported them politically. Then, this faction used this loyalty to bargain with the conservative wing, the Supreme leader. The discredited conservative wing needed legitimacy for the regime domestically and internationally, and the other wing now could deliver this in return for more economic and political resources. For the Parliamentary election of the February 20^th. 2004, the majority of the reformists who have even served as deputies were disqualified. They staged a sit in protest, and president Khatami with the speaker of the Parliament engaged in a negotiation with the Supreme leader in order to remove this disqualification, but failed. The election was conducted and conservative deputies as it was planned were chosen.

The reformist’s deputies, while protesting, never appealed to the people for support in order to resist the complete domination by the Supreme leader. People did not come to their support either. People did not support them, because deputies had lost their credibility with most of the people and the deputies never requested and appealed to the them, because they feared that the regime might loose control of the situation with violent conflict, and consequently, both factions may loose political power. Secondly, their rent seeking activities and kickbacks while in office has made them a target of corruption investigation by the conservative wing in control of judiciary, if they do not remain silent. According to Human Rights Watch 2004 report, Islamic Republic judiciary launched a politically motivated campaign against corruption in December 2001 that netted about fifty people close to parliament deputies and government. Also, because the president and deputies under the current Constitution are first selected by the Guardian Council of the Supreme leader to run for their position, they have a weaker bargaining position than, if they are elected independently by the electorate.

The Supreme leader dismissed the so-called reformists. He knew that reformists have lost their credibility with the people and unable to exert effective political pressure through resistance and no longer can deliver loyalty for the regime as before. Therefore, from the political economy view points they were excluded to participate in sharing the political power. It should be noted that Khatami and reformist deputies were not able nor wanted to reform the system, because, they have pledged their allegiance to the Islamic Republic Constitution and Supreme leader. The latter are the required credentials to get and have any position in the government.

The regime, with all the hanging and flogging in Iran’s city squares and stoning and amputation in the public places, they have tried to create an environment of fear that increases the cost of political activism, such that the disgruntled does not get involved in political activities and remains silent. The regime wants to make sure that if they can not absorb the disgruntled as loyal supporters, they should become inactive and do not engage in politics. The regime knows that these people have the potential and may sympathize with and join the activists group. The conservative faction, and so-called reformist’s faction, both are the two side of the same coin or two faces of the Islamic government. The reformists’ disagreement with the conservatives is over the harsh repressive acts in public, which they believe are damaging the Islamic Republic’s international image. They also bargain for greater portions of economic resources which are under the control of conservative faction. Other than that, they believe in Islamic governance, Supreme Leader and the constitution of the Islamic Republic, which guarantees the supremacy of the religious leader and his absolute power over the people and the government.

The reform of the existing system and gradual transition to democracy are impossible with the current Constitution, as well as the Supreme religious leader having absolute authority and veto power. The reform, gradual reassignment of policy-making power, and emergence of democracy are a possibility with a bipolar system of government in which power is gradually transferred from autocratic leader to a broadly freely elected representative government. This is similar to transition in many European countries from king dominated system to parliamentary system of governance (Congleton, 2001).

It should be noted that in the current crisis in Iraq, the Islamic regime is trying to create and take advantage of turmoil in country to engage in a diplomatic dialog and exchange with the European countries and the United States. The goal is to warm up its relations and increase the regime’s legitimacy. If the regime were able to achieve this goal, another wave of repression is anticipated for the reestablishment of the autocratic Supreme leader credential. moreover, It is important that Western countries and the US, in their foreign policy formulations toward Islamic regime should not compromise on human rights violations; they should ask and push for observation and respect for human rights issues. Today in Iran, majority of the people do not believe in Islamic ideology and Supreme leader with divine right, but rather, struggling for ideals of popular sovereignty and universal suffrage. Iranian people are the only people in the region with strong conviction for separation of religion and state with a democratically elected government. Western countries should help this movement with their political and moral support. A democratic system of government in Iran will greatly impact democratic movements in the region.

V. Western Countries’ Policy toward the Islamic Regime

The Islamic Republic of Iran was the first government established with the Islamic ideology in the region in 1979, and since then Islamic extremism and terrorism have increased. These are threats to the security and well being of the people and the country’s economy. As it is observed in Iran and Afghanistan under Taleban, the Islamic Government is the most repressive regime, and it has tried to expand its influence in other Moslem countries, especially supporting the Islamic extremist groups in regional conflicts. The Islamic regime in Iran is using these extremist groups to gain and improve its negotiating power and legitimacy among western countries. Therefore, policies of the democratic governments, the United Nations, and international human rights organizations toward the Islamic regime are very important. The Iranian opposition groups and parties with democratic platform for the country should try to obtain the moral and political support from western democracies and International Organizations, to unravel the Islamic regime’s hold on power.

With regard to democratic governments, especially western countries, it is assumed that the promotion and development of freedom, liberty, human rights and democracy are their foreign policy objective, rather than their economic interests which should be less significant and secondary. It is known that, this assumption may not hold in some of the major western countries in which economic interest dominates their foreign policy objective. Nevertheless, their value and major goals are the support and defense of liberty and human rights. Thus, the role of the Iranians in Diaspora should be to lobby western governments and politicians to pressure the Islamic regime to respect human rights and liberty of individuals in the country. Nonetheless, the fundamental questions for the democratic Western governments are: (1) should the democratic countries expand their economic ties with the Islamic and dictatorial regime in Iran? Or are they going to the economic restrictions to limit the regime’s ambitions? (2) Should not the democratic countries of Europe, Canada, and the United States in their diplomatic and economic relations demand from the Islamic regime the respect and observation of the human rights? Answers to the above should help in finding out which policies curb terrorism, the repression and improve human rights conditions in Iran. The improvement of human rights conditions in Iran, supplemented with the moral and political support of the democratic opposition by the Western democratic governments can unravel the Islamic regime’s hold on power. An empirical study of 150 countries showed that ensuring human rights, civil liberties and freedom of press significantly reduces the chance of dictatorial regime’s survival(De Mesquita and Downs, 2005).

In regard to the democratic countries’ trade policy toward the Islamic regime, the following factors should be considered: First, the expansion of the economic relations of the democratic countries with the Islamic regime will improve Iran’s economic growth and performance. With the improved economic performance, the regime will claim more credibility and legitimacy, and consequently, will increase the level of loyalty to the regime. The improved loyalty may result in more repression of the opposition and democratic forces, and more political power for the regime. Therefore, any expansion of trade relation with Iran, or in case of the United States, lifting of the trade sanctions, must obligate the Islamic regime to honor and observe the human rights conditions. This is the least that can be expected of the democratic countries. If they can not ignore their economic interest, they can use diplomatic pressures to force the regime to respect human rights of the Iranian people. Second, some people may argue that expansion of western countries economic tie with the Islamic government will improve economic conditions in the country. With the accumulation of wealth by segment of the population, they are likely to demand more freedom, thereby diminish their loyalty to the regime. With regard to this point, in Iran with more than eighty percent of the economy owned by the government and Foundations under the control of the Supreme Leader, and most of the private sector owned by the clergy and their relatives and associates, those who benefit would likely want to preserve and maintain the regime which has endowed and provided them with opportunity to accumulate such a wealth. These wealthy individuals have their wealth both inside and outside of the country; thus, the argument in favor of the trade expansion with Iran, does not hold. Third, expansion of foreign trade will increase the regime’s revenue from tariffs. Also, trade may increase the Iran’s national income and increase the tax revenue. With the increased national income, the regime can claim credit for this improvement and loyalty to the regime is expected to increase. As a result, the Supreme Leader, being the guardian of the regime, has more economic resources in his disposal to maintain his hold on power by spending on repression and loyalty. The result is always increased political power and extension of the regime’s political life. For example, in recent years, with the increase in oil price, the regime has become more repressive. Therefore, the link between economic growth and political liberties and democratization in authoritarian states is weak. Economic growth, rather than being a force for democratic change in authoritarian states, can be used to strengthen tyrannical regimes(De Mesquita and Downs, 2005).

The political implications of the above three factors are undoubtedly related to the increase or decrease of loyalty to the regime. Therefore, if the foreign trade tends to increase the level of loyalty among the regime’s supporters, which in turn increases the level of repression against the group of the people called outsiders such as students, writers, journalists and political activists, the trade contracts should be made contingent upon respect for human rights in Iran to prevent repression. Therefore, trade with the dictatorial Islamic regime can be expected to produce beneficial effects if it is accompanied by human rights constraints. The World Bank and International Monetary Fund should also consider these factors in dealing with the repressive regimes such as the Islamic Republic. It should be emphasized that all dictatorial regimes, that have collapsed have been due to the decline in economic resources and revenues available to them. For example, Soviet Union collapsed because of its engagement in arms race and decline in economic performance. In China, with 9.4 percent average annual GDP growth, the highest growth rate in the world in the last 25 years(Bijian, 2005), the level of repression has not declined.

The diplomatic crisis in the relationship between United States and the Islamic Republic after the revolution was created by Khomeini who was facing the growing opposition to the Clerical Rule. By invading the United States Embassy and taking Americans hostage for 444 days, regime diverted attention. He subsequently increased political executions, imprisonment, and torture and wide spread repression in order to strengthen the regime’s hold on power. This international crisis was followed by Iran-Iraq war, which was continued for eight years. During this war, Khomeini said that the war has been a God given gift for the regime! The regime used the war to eliminate any opposition and improve his hold on power and augment the regime’s political power. When the regime ended the war in 1988, up to 30,000 political prisoners were massacred in period of three months in the summer of that year. During the earlier years, the regime was using the international crisis to repress and eliminate the opposition, because it had legitimacy domestically due to revolutionary fervor. These days the regime tries to improve its international relations, especially with the Western European countries and the United States. This is because the regime has lost its credibility and legitimacy with the people. If the regime succeeds in improving its international legitimacy, it is likely to see another waive of massive repression. If the aim of Western governments is to promote freedom and democracy and fight the international terrorism, it is critical that these governments stay on the side of the Iranian people in their aspiration for liberty and democracy, as well as support their rights in determining their future political system. The public in non-Arab Iran has a better impression of the United States than in all other countries in the Middle East(Gause, 2005) and is more ready for democratic change. It is important to note that a democratic and secular system of government in Iran has great political implications and repercussions for the Middle East and the rest of the world, especially Western democracies, given the international terrorism, which the Islamic regime in Iran sponsors. The key to unraveling the autocratic religious leader’s hold to power is to attack the instruments that are used to maintain that hold on population, namely repression and loyalty support. With the political pressure of Western democracies on the Islamic regime and their support of the Iranian people in their pursuit of liberty, people become less fearful of the regime and can organize themselves and through mass civil disobedience to remove this regime from power and establish a secular and democratic system of government.

VI. Conclusion

The Islamic Republic in Iran is a dictatorial and authoritarian system with Islamic ideology. As a rentier state the regime has all of the oil, natural gas and other minerals and major industries in the country under its direct control. The regime in its political power production function uses financial resources of the country, to buy loyalty and repress the opposition in order to build and maintain power. The result is a regime, that is the most repressive and corrupt in the world today. This regime, with the current Constitution and political structure, in which Supreme religious leader has absolute power can not be reformed. It must be changed. Reform is possible in Bi-polar political system, not in Uni-polar Islamic regime. There is strong opposition by the Iranian people to this regime. Western democracies and all international organizations in their dealing with the Islamic regime in Iran, should pressure the regime to respect human rights, and at the same time should lend their moral and political support to the Iranian people in their struggle for liberty and justice, and a regime change. A democratic and secular system of government in Iran has broad positive political impact in the region, and for the fight and defeat of international terrorism.

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Note: This paper was accepted for publication in 2006 and is published in Volume XXIV, No. 1 Spring 2007, Journal of Third World Studies.