As part of the Iran nuclear deal last July, the International Atomic Energy Agency (IAEA) was granted unprecedented intrusive access to Iranian facilities in order to verify Tehran’s compliance with the provisions of the Joint Comprehensive Plan of Action. On Dec. 2, the IAEA submitted a report with three key findings:

Iran had implemented all its commitments on the agreed schedule.

A “range of activities relevant to the development of a nuclear explosive device were conducted in Iran prior to the end of 2003 … and some activities took place after 2003.” However, these activities were limited to feasibility and scientific studies and the acquisition of technical skills; there are no “indications of activities … relevant to the development of a nuclear explosive device after 2009.”

The IAEA found no evidence of “the diversion of nuclear material in connection with the possible military dimensions to Iran’s nuclear program.”

Accordingly, on Jan. 16 the provisions of seven previous U.N. Security Council resolutions between 2006 and 2015 were terminated and $100 billion worth of frozen Iranian financial assets released. But unilateral U.S. sanctions against its alleged missiles program remain, which Tehran denounces as legally and morally illegitimate.

Sanctions played some role in getting to this outcome, but not a decisive one. Policy options to change or contain undesirable behavior range from military strikes through punitive sanctions to diplomatic persuasion. Overhanging the selection of the right instrument (or mix of them) for halting Iran’s suspected pursuit of nuclear weapons was the long history of mutual suspicions, recriminations and distrust.

Key milestones were the overthrow of the Mosaddegh government in 1953 with the complicity of British and U.S. intelligence services, the West’s support of the authoritarian shah of Iran, the Islamic revolution of 1979 and the siege of the U.S. Embassy in Tehran with American diplomats held hostage for 444 days (1979-1981).

The bitter enmity had framed regional geopolitics since 1979. No U.S. president has had the space in Washington’s toxic politics to enter into any dialogue with Iran’s Islamic regime. If the inflated rhetoric of the U.S. presidential primaries is to be believed, instead of lifting sanctions, some of the candidates would have tightened the screws. The most likely result would have been a swift unraveling of the international coalition whose combined sanctions had proven quite punishing. Besides, if Tehran became convinced that sanctions would never be lifted, why would they cooperate? The hardliners’ stance would have been vindicated that any talks with Americans amounted to drinking from a poisoned chalice.

Military strikes have always been on the table of U.S. policy options. The balance of sober assessments in Washington and allied capitals was that at best, they would inflict some material damage and cause a temporary setback to Iran’s nuclear weapon capabilities. Against this, it would have four deleterious consequences. Tehran would resume pursuit of the bomb with grim determination. This would be backed by expelling all international inspectors and exiting the Nuclear Non-Proliferation Treaty (NPT). Iranian society would unite behind the government in this goal. And U.S. global reputation as a reckless warmonger would be cemented.

This left economic sanctions. But they too have a bad history, starting with failures against Italy and Japan for invasions of Abyssinia and Manchuria between the two World Wars and extending to the folly of the U.S. sanctions on Cuba, a sorry record against Ian Smith’s illegal regime in Southern Rhodesia, and ineffectiveness in punishing India and Pakistan for the 1998 nuclear tests.

Belief in a limited utility of sanctions rested on a study of 115 cases between 1914 and 1990 that identified a success rate of 34 percent. Robert Pape subjected these to rigorous analysis to reduce the successes to just five cases.

When national regulators scrutinize medicines, any drug that betrays, say, a 10 percent damaging health side effect will be banned. Yet with sanctions, the international community seems prepared to tolerate a 70 to 90 percent failure rate, some with very grave humanitarian consequences. The multi-institutional Targeted Sanctions Consortium analyzed all 22 U.N. targeted sanctions regimes (divided into 62 case episodes) imposed until 2013 and concluded that only in 22 percent of the cases had they been effective in achieving even just one of three sanctions goals (changed behavior, constrained access to critical goods and funds, and stigmatization of target regimes).

Consistent with the general pattern of sanctions being ineffectual, Iran’s number of centrifuges increased from 164 in 2003 to 19,000 in 2013, the stockpile of low enriched uranium grew from 100 kg to over 8,000 kg and its uranium enrichment increased from 5 percent to just below 20 percent. Perversely, according to senior former U.S. officials and analysts, limiting the policy toolkit solely to the pressure of sanctions may have delayed the search for a mutually acceptable deal.

The best time for ending a conflict is when it creates a mutually “hurting stalemate”: Both sides realize they are not going to win the war but are paying high costs while the conflict continues. A combination of U.N., U.S. and EU sanctions regimes is potentially more effective than U.N. or unilateral sanctions alone. The combined tough sanctions had badly crippled Iran’s economy and damaged its international standing. But America, too, paid a heavy military, financial and reputational price for its addiction to bombing and invading Muslim countries, leading to a collapse of domestic support for foreign interventions.

The nuclear deal was not the result of Tehran’s capitulation, but of the election of a new president keen to explore a rapprochement with the West and the shift in the U.S. red line, over strident Israeli objections, from “no enrichment” to “no bomb.”

Through the decade of U.N. and Western sanctions, Teheran had managed to expand, deepen and entrench its capability through acquisition, stockpiling and building of nuclear materials, skills and facilities. The narrower the gap between capability and breakout time to the bomb, however, the closer Iran came to being bombed. Others (Saudi Arabia, Egypt, Turkey) would race to their own bombs if they concluded Iran stood on the threshold of nuclear weapons.

Thus Iran was close to the inflection point in the dynamic and delicate regional balance of its interests vis-a-vis Sunni and Arab rivals. Moreover, Washington had graciously overthrown Tehran’s two most troublesome neighbors in Afghanistan and Iraq, where the U.S. expended the most blood and treasure over a lost decade of futile nation-building, but the biggest strategic victor was Iran.

Iraq President Saddam Hussein’s ouster in 2003 brought a halt to Iran’s nuclear weapons program but not the expansion of capabilities. Thanks to Western strategic myopia, Iran was able to expand its regional influence dramatically without nuclear weapons. With a large population, resources and conventional military power, and as the font of Shiite normative authority, Iran has emerged as the regional powerhouse.

The key policy takeaway therefore is “incentivized sanctions”: a mixed strategy of punishment and inducements and a graduated series of incremental lifting of sanctions in return for benchmarked good behavior. Sanctions can be a useful policy tool, but only as part of a coherent strategy that includes diplomacy and the credible threat of force, not as a standalone policy that is a substitute for diplomacy.

Ramesh Thakur is a professor in the Crawford School of Public Policy and director of the Center for Nuclear Non-Proliferation and Disarmament, Australian National University.

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