The lot of Iranian presidents is not a happy one. They enter office as heroes, promising big changes to improve the lives of their fellow citizens. Almost without exception, they leave as broken men.

Iran’s problems frequently prove more intractable than its new leaders anticipate. But a bigger obstacle Iranian presidents face is that they have responsibility without authority. With large swaths of the government and the economy under the control of Iran’s clerical elite and thus beyond politicians’ reach, presidents are able to affect the tone more than the substance of Iranian life. Iran’s is a hybrid system, divided between elected and unelected leaders, and the latter almost always have the upper hand.

Masoud Pezeshkian’s July 5 victory in Iran’s snap presidential election nevertheless revived hope inside and outside the country that things might be different this time. Pezeshkian ran as a reformist, promising greater government transparency, economic growth, and personal autonomy. Early indications suggest that he is seeking a pragmatic path, building public enthusiasm for his agenda while showing unalloyed loyalty to Supreme Leader Ali Khamenei. Pezeshkian’s bet seems to be that he will be able to wrest some concessions from the clerical establishment that will enhance Iranians’ daily lives.

Pezeshkian may help Iranians win greater social freedom, and he might be able to get the country some relief from crushing Western sanctions. But such achievements would not herald a more moderate direction for Iran. Increasingly, Iran’s aggressive posture and isolation from the West is driven not just by the clerical establishment, which is a waning force, but by the security establishment, principally the Islamic Revolutionary Guard Corps, which has amassed tremendous influence over the country’s government and economy. This should worry those who hope for a more conciliatory approach from Tehran: an Iran in which the IRGC wields greater power will be a more insular Iran—and a more insular Iran will be a more dangerous Iran.

More than any other faction in Iran, the IRGC profits from isolation. The heavily sanctioned Iranian economy spins off billions of dollars in smuggling revenues that the group dominates. That money, in turn, supports conservative patronage networks and funds the Iranian proxies across the Middle East that form the so-called axis of resistance. In effect, the IRGC runs a complex Ponzi scheme that perpetuates the authority and influence of a select few at the expense of ordinary Iranians. That fact, more than any resistance the clerical elite put up to Pezeshkian, will pose the most significant obstacle to any effort he makes toward reform and moderation.

BORN OF REVOLUTION

After the 1979 Iranian Revolution, Ayatollah Khomeini, the country’s first supreme leader, established the IRGC to safeguard the young Islamic Republic. The idea was to create a rigorously loyal entity separate from the conventional armed forces for at least two reasons. One was to serve as a counterweight to an army that might be reactionary or have its own ambitions for power. The other was to protect the new system from internal and external security threats more broadly. The IRGC’s ideological connectivity and fealty to the Islamic Republic has helped it grow and given it influence and privileged status within the state. During the Iran-Iraq War, which stretched from 1980 to 1988, the IRGC was instrumental in quickly mobilizing to defend against Saddam Hussein’s invasion. Its members were involved in both frontline combat and guerrilla warfare. Meanwhile, the Basij militia, a largely volunteer force eventually incorporated into the IRGC, was used to repress dissent and maintain public order.

After the war ended, the IRGC played a major role in the reconstruction of Iran’s infrastructure, extending beyond military rebuilding to include significant economic ventures. In 1989, the IRGC established Khatam al-Anbiya Construction Headquarters, which became one of Iran’s largest contractors. The organization has undertaken dam construction, road building, and energy sector development, significantly increasing the IRGC’s economic footprint. In the years since, the group has expanded into telecommunications and banking. This economic diversification provided the IRGC with significant untaxed financial resources independent of state control. After the Joint Comprehensive Plan of Action was signed in 2015, the IRGC, fearing a loss of market share, intervened to slow down deals with international companies. Consequently, the IRGC’s role has expanded far beyond its initial mandate, and its size has increased significantly, from an estimated 10,000 members in late 1979 to somewhere between 150,000 and 190,000 today.

Designed to constrain if not alter Iranian behavior, sanctions and economic isolation have become the de facto tools of U.S. policy toward Iran. Rather than provoking a change in Tehran’s behavior, however, sanctions have produced the opposite effect. The IRGC, already a dominant actor, has become more present in the economy to keep the system afloat, at the expense of ordinary people and the private sector. The IRGC has captured licit and illicit trade, embedding corruption and Mafia-style criminality through a network of shell companies used to circumvent sanctions. In the absence of international investment and limits on oil sales, the IRGC has taken to funneling its money through oil exports, albeit at discounted prices, and the group relies on its financial network in Iraq, Lebanon, and Syria for access to these markets and, with it, liquidity.

A STATE WITHIN A STATE

Since 1979, the Iranian regime has sought to project both its Islamic and revolutionary bona fides. In scenes that have often seemed made for television, robed clerics regularly exhort huge crowds to oppose the United States, the Western-led global order it represents, and “the Zionist entity” it supports. Meanwhile, Iran and its allies and proxies—the Assad regime in Syria, Hezbollah in Lebanon, Hamas in the Palestinian territories, the Houthi rebels in Yemen, and various Shiite militias in Iraq—engage in destabilizing acts of brinkmanship, provocation, and terrorism.

But for most Iranians, this politics of resistance is little more than resistance theater. They long ago lost patience with the clerical leadership and lost interest in revolutionary Islamism. The issues that concern ordinary Iranians the most are the stagnant economy (which has produced a brain drain of capable young people) and enforced social repression (whose harshest measures are reserved for women). Those are the grievances that have led Iranians to take to the streets in massive demonstrations in recent years.

As Iran’s clerical establishment has lost stature, the IRGC has picked up the slack, increasingly operating as a state within a state. Although it is at least notionally aligned with the clerics and beholden to Khamenei for as long as he survives, the IRGC has its own sources of wealth and power and few sources of external accountability. The group has cultivated political influence throughout most if not all Iranian institutions. Its constitutionally defined mandate to protect national security has enabled it, with the support of the supreme leader, to establish a repressive apparatus at home while also advancing a resistance-oriented foreign policy abroad.

The IRGC’s political influence has grown alongside its economic expansion. Many former IRGC members hold positions within the government (including the cabinet and the parliament) and serve as provincial governors. The group’s senior commanders sit on the Supreme National Security Council, the body tasked with formulating nuclear, foreign, and defense policy. Many key figures in the IRGC play crucial roles in the office of the supreme leader. The IRGC also oversees several major security institutions and even influences the revolutionary courts, which hear cases related to national security. Since the outbreak of student demonstrations in 1999 and in every demonstration over the past 20 years, including nationwide protests of 2009, 2017, 2019, and 2022, the IRGC has played a prominent role in cracking down on domestic dissent. The group is also spearheading Iran’s burgeoning security and defense relationship with Moscow, and its foreign arm, known as the Quds Force, provides direct financial and material support to members of the axis of resistance.

And yet the IRGC is not monolithic. Despite high degrees of loyalty, discipline, and paranoia, like any large institution, it has experienced internal tensions. Disagreements and generational gaps have emerged over involvement in regional conflicts, relations with the West, and the handling of protests, with younger pragmatists appearing less ideological and more open to engagement and social liberalization than older veterans. The IRGC is also not composed of only conservatives; some members have supported reformist politicians, including in the recent presidential election. Allegations of corruption, financial misconduct, and involvement in domestic repression have also tarnished the IRGC’s public image and could affect its long-term role.

Nevertheless, there is no doubt that the IRGC will act as a guarantor of stability whenever Khamenei passes from the scene. The organization will surely influence the succession process, supporting an outcome that will protect its own interests and safeguard its role as the architect and chief administrator of the axis of resistance. This continued entrenchment will come at the expense of already declining clerical influence.

A MILITARY THAT WON’T MODERATE

For a sense of what Iran might look like in a post-Khamenei period in which the IRGC is ascendant, one might imagine that Egypt offers a hint. Soldiers have led Egypt and dominated its government since a group of officers overthrew the monarchy in 1952. In the decades since, nominal civilian rule has provided a thin façade over the country’s real powers: the military establishment and the security services. The country has had a single civilian president: Mohamed Morsi, an Islamist who was elected in early 2012, after the Arab Spring revolts, and whom the military and security services helped dislodge in July 2013.

The man who has ruled the country ever since, Abdel Fattah el-Sisi, is a former general who has been embedded in military institutions since he was 16 and reserves his deepest trust for the military establishment. More than half the governors of Egyptian provinces are retired generals, and Sisi has recruited general officers to head a large number of governmental and quasi-governmental economic initiatives. The military also has a direct hand in the economy through institutions such as the Ministry of Military Production, the Egyptian Armed Forces Engineering Authority, and the Arab Organization for Industrialization (which is principally a weapons manufacturer).

In Egypt, military control initially prompted a foreign-policy reorientation, with President Gamal Abdel Nasser embracing anticolonialism and nonalignment in the Cold War and supporting revolutionary movements in places such as Yemen and Algeria. Eventually, however, the entrenchment of the Egyptian military acted as a stabilizing force in foreign policy. In the 1970s, under President Anwar al-Sadat, a former officer, Egypt became a status quo power in the Middle East, partly because the military leadership’s economic interests became deeply tied to Western investment. Sadat signed a peace treaty with Israel and searched constantly for other ways to draw hundreds of billions of dollars of aid and investment into Egypt. All the while, the military maintained its privileged place in the economy and profited handsomely. Sadat’s successors, first Hosni Mubarak (a former general) and then Sisi, have sustained that policy.

But as things stand today, the IRGC’s entrenchment in Iran would play out in a far different manner. Whereas having a praetorian elite has over time moderated Egypt’s international posture, in Iran it will have the opposite effect. Egypt was never under strict sanctions, and the Egyptian military’s business model never relied on Egypt’s isolation from the global economy. By contrast, the IRGC profits from sanctions-busting revenues, and much of the investment it receives comes from China, which has an interest in sustaining Iran’s estrangement from the West. In addition, Iran’s network of regional proxies provides the country with strategic depth, and a strategic reorientation away from China and other anti-Western powers such as Russia and North Korea would leave Iran isolated and exposed.

PRAGMATISM OVER PRESSURE

Western audiences have too often paid attention to the wrong factors in Iranian politics. They focus their ire on Iran’s cadres of dour, bearded clerics and get their hopes up for reform-minded presidents. The true center of gravity in Iran, however, is less visible: a quietly ascendant IRGC. Pezeshkian can score some small internal victories against conservative opponents, but it would be a mistake to confuse any battle he wins against clerical control of society for a fundamental power struggle or a shift in Iran’s international posture. The real power increasingly lies with the IRGC, and its interests and business model militate against accommodation with the outside world. And so Western powers hoping to encourage a deeper shift shouldn’t put their faith in Pezeshkian alone; instead, they need to find ways of shaping the interests of the IRGC.

One path is to double down on a one-way escalation of international sanctions and terrorist designations, with the hope of precipitating regime collapse. This is often the path of least resistance in Washington, in part because so much of what Iran does is indefensible. But it is important to note two things. First, U.S.-led sanctions have rarely brought down a regime, however odious—whether Fidel Castro’s Cuba or Muammar al-Qaddafi’s Libya or Bashar al-Assad’s Syria. Regimes adjust to them over time and, like the IRGC, learn to use the confrontation to serve their own political and economic needs. At least in the near term, greater sanctions will continue to secure the IRGC rather than weaken it. Second, a path of unalloyed confrontation pushes the IRGC to respond with precisely the sorts of behavior that the United States finds most objectionable, strangling the domestic economy at the expense of the Iranian people and bolstering its axis of resistance to show it is unbowed in the face of U.S. pressure.

The Iranian regime may be on its last legs, and a regime much more favorable to U.S. interests may replace it. If so, the United States should welcome such a regime while remaining conscious that U.S. fingerprints on regime change are more likely to delegitimize Iran’s new rulers than help them—especially given the long resonance of U.S. efforts at regime change in Iran in 1953.

Instead, a better policy would combine pressure with co-optation and engagement, with the aim of shaping internal Iranian choices and outcomes. Iran’s power brokers must not only know that their malign behavior will elicit a punishing U.S. response; they must also know that the United States will notice and respond if they cease such malign behavior. For example, if Tehran reduced its support for its proxies or distanced itself from Russia, Washington could respond by reducing its enforcement of sanctions.

It is possible to imagine an IRGC that, like Egypt’s military, becomes beholden to the status quo rather than regional upheaval. Outsiders often assume that because Iran’s rulers are hostile, they must be irrational, but the record suggests otherwise. A clear-eyed assessment of what the IRGC’s leaders genuinely fear and what they are willing to live with can illuminate pathways to a reduction in tensions. Pezeshkian may help facilitate better relations, or he may prove irrelevant. Either way, the United States’ approach should seek accountability and consistency and allow for the possibility of the pragmatic accommodation that it has pursued with Egypt. Such an approach is more likely to serve U.S. interests over the long term. The alternative path of pressure will only strengthen the IRGC’s grip on the country and push the IRGC to double down on confrontation.