These days, many critics of negotiations between the United States and the Islamic Republic argue that Tehran is not dealing from the same assumptions as most other governments. The Islamic Republic, they say, is not simply an authoritarian state pursuing national interests. It is a revolutionary project driven by an ideology that combines Shiite Islamist doctrine, hostility toward Israel, opposition to Western influence, and elements of anti-capitalist and anti-liberal thinking inherited from 20th century revolutionary movements.
From this perspective, expecting the Islamic Republic to behave like a conventional rational actor is a mistake. A government driven by ideology will not necessarily make compromises simply because they are economically beneficial or strategically sensible. Its leaders may be willing to endure sanctions, isolation, and even military confrontation in pursuit of ideological goals.
There is considerable evidence supporting this argument. Since 1979, the Islamic Republic has repeatedly prioritised revolutionary objectives over economic development. The regime has invested enormous resources in regional proxy networks, missile programmes, ideological institutions, and security organisations even as ordinary Iranians have faced inflation, unemployment, and declining living standards.
Yet there is another dimension to this discussion that receives far less attention. Ideology may explain why the Islamic Republic was founded but it does not fully explain how it has survived for so long. After almost five decades in power, the Islamic Republic is no longer simply an ideological movement. It has become a political and economic system that provides wealth, influence, and protection to a large network of beneficiaries.
At the centre of that system stand the Islamic Revolutionary Guard Corps and a collection of powerful foundations, families, investment groups, and state-linked economic institutions. Researchers increasingly describe this network as a military-bonyad complex (bonyads are tax-exempt, state-linked charitable foundations in Iran) that controls vast sections of Iran's economy and links political loyalty directly to economic privilege. According to various analyses, these institutions have come to dominate major sectors ranging from construction and energy to banking, telecommunications, transportation, and infrastructure.
Over the years, political influence and economic power have become inseparable. Senior officials, military commanders, business executives, clerics, and their extended networks often operate within the same ecosystem. Access to contracts, licenses, state resources, and economic opportunities frequently depends on proximity to centres of power. These circles have even benefited from sanctions, as secret evasive tactics have given them a chance to pocket money. They see their power as a means of self-enrichment.
For example, the state severely restricts the availability of large sums in foreign currency and export-import licenses needed for trade. Only insiders can obtain dollars or euros for imports and there are numerous publicised examples of corruption in this system. Companies and individuals with political connections obtain currency and licenses but either never import the intended goods or bring much cheaper, often useless substitutes and deposit the dollars in foreign banks.
While some insiders and thinkers within the system may recognise that widespread corruption ultimately threatens political stability, many are more concerned with protecting their own profits and distributing patronage to preserve a loyal network of supporters.
This reality raises an uncomfortable possibility.
What if the primary obstacle to compromising is not ideological conviction alone, but the fear that compromise needed for a lasting peace could eventually unravel the entire system?
Many Western policymakers assume that concessions by the regime can eventually produce a broader process of normalisation, including reduced sanctions, economic recovery, and improved relations. A serious diplomatic opening would not simply improve economic conditions but could alter the political foundations on which the Islamic Republic has operated for decades.
But such assumptions may underestimate the risks that normalisation poses to many of the regime's most influential stakeholders. If the Islamic Republic genuinely reduces its confrontation with the United States, it becomes more difficult to justify extraordinary security measures at home. If sanctions are eased, demands for transparency and competition are likely to increase. If foreign threats become less central to official discourse, citizens may begin asking more questions about corruption, mismanagement, and the concentration of wealth among politically connected elites.
The danger for the ruling establishment is that concessions may not remain limited. One concession can create pressure for another. Diplomatic openings can produce demands for economic reforms. Economic reforms can generate demands for political accountability. Political accountability can challenge the privileges on which powerful interests depend.
For many members of the ruling elite, a transition to a more open economy would mean losing the privileges they have accumulated. For many of them, even the reopening of the US embassy in Tehran could symbolise a broader political opening, emboldening the public and raising expectations for further change.
On the other hand, if Tehran can force Washington to reduce sanctions without offering meaningful concessions, it can convince the public of its invincibility and prevent a domino effect.
Over decades, individuals and institutions connected to the state have accumulated enormous economic assets and influence. International sanctions investigations have repeatedly identified networks associated with state institutions and military organisations that control or facilitate billions of dollars in commercial activity. In the event of a major political transformation, many of these assets would likely come under scrutiny.
Future governments could face intense public pressure to investigate corruption, recover wealth, examine financial dealings, and hold officials accountable for past abuses. For some members of the elite, the consequences of losing power could include not only the loss of privilege but also legal jeopardy and public reckoning.
However, even this explanation is incomplete. Material interests help explain resistance to compromise but they do not fully explain why hardline positions are often actively rewarded. Focusing solely on fear risks portraying the regime's behaviour as defensive or reluctant. In reality, there are also powerful incentives that actively reward intransigence.
The Islamic Republic is not a monolithic actor. It is a collection of institutions, factions, personalities, and competing centres of power. Within that environment, displays of ideological loyalty have long functioned as a form of political currency, particularly during the 37 years of Ali Khamenei's authoritarian rule. He often distributed patronage according to the degree of loyalty that political figures demonstrated toward his leadership and edicts. Although Khamenei is no longer present, the system appears to be reproducing the same intransigence, as those now in power continue to rely on the formulas that sustained his rule.
Officials compete with one another for influence, access, appointments, and economic opportunities. Military commanders compete for budgets and authority. Politicians compete for the approval of powerful institutions. Clerics compete for their standing within the system. State media figures compete to establish revolutionary credentials. In such an environment, hardline positions can become politically profitable.
An official who argues for accommodation risks appearing weak whereas an official who denounces compromise may strengthen his revolutionary credentials. Calls for confrontation, resistance, and ideological purity often serve not only political beliefs but also personal ambitions.
As a result, the system frequently rewards those who defend the status quo most aggressively.
This helps explain why periods of diplomacy are often accompanied by fierce internal competition over who can appear most committed to revolutionary principles. Opposition to compromise is not merely an expression of belief. It is also a means of advancing careers, securing patronage, and increasing one's share of the benefits generated by the system.
The consequence is a self-reinforcing cycle where ideology protects privilege and privilege, in turn, creates incentives for even greater displays of ideological commitment. Competition among insiders then pushes officials toward increasingly uncompromising positions, while external confrontation reinforces the legitimacy of the entire system.
Seen through this lens, the challenge facing negotiators is deeper than many assume.
The problem is not simply persuading the Islamic Republic that peace would be beneficial. Many ordinary Iranians would clearly benefit from reduced tensions and economic normalisation. The problem is persuading a political system whose most influential beneficiaries often have far less to gain from normalisation than from preserving the conditions that sustain their power.
This is why diplomatic openings with the Islamic Republic have repeatedly proven fragile. The greatest obstacle may not be a lack of incentives from the outside. It may be the reality that meaningful reconciliation threatens some of the very interests that dominate the system from within.
For nearly half a century, ideology has been one pillar of the Islamic Republic's durability but it alone does not explain its resilience. The other pillar is a vast network of political and economic interests that has grown around that ideology and now depends upon it.
A system built on both conviction and privilege is far more difficult to reform than one built on conviction alone. And that may be one reason why peace with the Islamic Republic remains so elusive.
Mardo Soghom is a former deputy editor and regional director for West Asia at Radio Free Europe/Radio Liberty
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