Institutional Aspects of the Iran Deal

14 July 2015, 1613 EDT

I woke up this morning to read (a few hours behind most of you…one of the few downsides to living in the Pacific Northwest is living behind the news cycle!) about the finalizing of a nuclear deal between the E3/EU+3 and Iran. I’ll leave it to others to analyze whether the deal is a good one and whether it will indeed limit the ability of Iran to develop a nuclear weapon. Charles Krauthammer hates it. Joe Cirincione loves it. Jeffery Goldberg isn’t quite sure what he thinks of it.  My own thinking tends towards agreeing that the agreement isn’t spectacular, but that it might be the least worst option of military strikes (unlikely to have a meaningful, lasting impact and almost certain to increase Iran’s resolve to develop an extant weapon) and indefinite sanctions (a degrading commodity that have limited impact).

Still, rather than focus on the efficacy of the agreement and its details, I’d like to talk about a different aspect: what we can learn about Iran’s intentions to comply with the agreement or build a nuclear weapon. My first published work, “Institutional Signaling and the Origins of the Cold War,” addressed the ability of states to use international agreements and organizations to force other states to reveal privately held information about their preferences and intentions (as my institution has a subscription to Taylor and Francis, I’m not sure if the article is behind a paywall. If it is, you can also find it here or e-mail me and I’ll send it to you). To make a long article short, I argue that:

the process of negotiating and creating international institutions plays a critical role in enabling states to send and evoke credible statements of preference. Institutions, by virtue of their ability to impose costs on states as a result of compliance with the rules and obligations,provide a means of generating signals that will be accepted as credible by the policymakers of a given state. Those signals will be interpreted as revealing vital information about the true nature and interests of other states.

In order to:

foster cooperation or distinguish threats, states need a mechanism that can create a separating equilibrium, which is a decision point that establishes a costly choice for an actor, whereby an actor of one type will choose one course of action, while an actor of a second type will, necessarily, select a different action. Thus, an actor’s type is revealed by its decision. The separating dynamic can be created by the presence of costly actions, which creates separation of types by allowing an actor of one type to signal its preferences by taking a course of action that incurs costs which an actor of a different type would not be willing to pay. The signaling costs must be sufficiently high that an actor trying to send a false signal will be dissuaded, but they cannot be so high as to negate the benefits of sending the signal in the first place.

States can create separating equilibria by creating or joining international institutions. IOs can send credible signals of preference because:


they reveal and affect the very nature of the state: its domestic structures,political arrangements, and intentions. Because institutions can internalize their values within member states, a state that is aware of the likely costs of an institution will only accede to those institutions that it perceives to be commensurate with its interest. Institutions that codify or internalize undesirable rules, obligations, and norms will be either be rejected, or entered into and not complied with.


I then identify four characteristics of a institutionalized relationship, all four of which must exist if the institution is to generate signals of preference. First, there must be clear and agreed upon norms of behavior. Second, there must be some degree of procedural regularity by which actors will expect to exchange information and have their own compliance with institutional requirements verified. Third, there must be a mechanism for resolving disputes between the actors and imposing punishment in case of defection. And fourth, there must be some “shadow of the future” in which the potential benefits of long-term cooperation outweigh the short-term benefits of defection.

So, apart from the question of whether this agreement will prevent or delay Iran’s acquisition of a nuclear weapon, can it function as some kind of separating equilibrium and help the US discern if Iran is indeed intent on joining the status quo and setting aside its nuclear ambitions (the article focuses on how the US used various institutions like the Baruch Plan and the nascent UN to learn whether the Soviets were in fact interested in the kind of great power cooperation that FDR envisioned)? The beauty of this institutional approach to analyzing the agreement is that even if the agreement fails to contain Iran, if it is well-designed it can reveal information about Iran’s intentions that might otherwise be unknowable.

After a first read of the text of the agreement itself, it seems that there are two potential candidates that could serve in an institutional signaling role: the IAEA (pp. 39-43 of the agreement) and the dispute resolution/sanctions mechanism (pp. 19-20). Do we see evidence of the four elements of institutionalization?

In the sections concerning the IAEA and transparency, we see language like “Iran will permit the IAEA the use of on-line enrichment measurement and electronic seals which communicate their status within nuclear sites to IAEA inspectors,” “Iran will make the necessary arrangements to allow for a long-term IAEA presence,” “Iran will permit the IAEA to implement continuous monitoring…to verify that stored centrifuges and infrastructure remain in storage,” and “Iran will permit the IAEA regular access, including daily access as requested by the IAEA, to relevant buildings at Natanz.” That’s all pretty strong language that creates serious obligations and creates, as I wrote above, “clear and agreed upon norms of behavior,” norms that are more or less in line with international standards.

On the other hand is section Q (“Access”), which opens by stating that “requests for access pursuant to provisions of the JCPOA will be made in good faith, with due observance of the sovereign rights of Iran, and kept to the minimum necessary to effectively implement the verification….” According to paragraph 75, “if the IAEA has concerns regarding undeclared nuclear materials or activities, or activities inconsistent with [the agreement], at locations that have not been declared…the IAEA will provide Iran the basis for such concerns and request clarification.” The rest of the section goes to outline what will happen next: Iran must respond to the IAEA’s concerns. If that response is unsatisfactory to the IAEA, it may “request access to such locations.” Iran then gets a chance to propose an alternate method for resolving the IAEA’s concerns that must “enable the IAEA to verify the absence of undeclared nuclear materials and activities.” If within two weeks of the original request that mechanism is unable to verify said absence or if both parties are unable to agree to a suitable alternate mechanism, the issue is then handed over to the Joint Commission (the E3/EU+3 and Iran) for resolution; if they are unable to resolve the issue, the matter will be put to a vote requiring 5 of the 8 members of the Joint Commission. Iran would then have 3 days to implement the decision.

This is a pretty serious process that has multiple checkpoints and implementation stages. Keeping in mind that I’m less interested in whether Iran will in fact comply but rather whether the agreement will be sufficient to reveal whether Iran intends to comply, the agreement as I read it is in fact a mostly successful one. It establishes clear norms and expectations of behavior and it creates a transparent process for exchanging information. Information about Iran’s intentions can be gleaned at multiple steps along the way; if at the end of the day, Iran refuses to allow the IAEA access even after the Commission has voted, the E3/EU+3 will have clear and unambiguous evidence of Iranian intentions. And that is more than we have today.

What about other two components of institutionalization: the dispute resolution mechanism and the shadow of the future? Here the record gets a bit mixed. The dispute resolution process is about as good as could have reasonably been expected. Rather than using the UN Security Council or a similar veto-driven process to demand access to sites not covered in the agreement, the agreement uses the Joint Commission and a simple majority. In the case of a need to reimpose sanctions, the process is a bit more complicated, but still effective. As paragraph 36 spells out, if either side believes the other is not complying, it has the right to convene an Advisory Board “which would consist of three members (one each appointment by the participants in the dispute and a third independent member).” The Board would then issue a ruling which, if it still failed to resolve the dispute, would then allow referral to the UN Security Council as a breach of the agreement. The Security Council would then have 30 days to pass a resolution to resolve the dispute; if it fails to do so “the provisions of the old UN Security Council resolutions would be re-imposed [the “snapback” of sanctions],” which would then in essence render the agreement dead.

Again, from an institutional perspective this is a solid arrangement. No one actor (I’m looking at you, Russia) can shield Iran from having to comply with an IAEA request for access or block the reimposition of sanctions. Given the makeup of the E3/EU+3, the US only needs France, Germany, the UK, and the EU to go along in order to fully implement the terms of the agreement. This is a much stronger dispute resolution than I would have expected Iran, or Russia for that matter, to agree upon.

The major weakness of the agreement is the shadow of the future. By mutual decision, the agreement is essentially only good for 15 years, after which Iran is more or less free to research, enrich uranium, and develop its nuclear program as it sees fit. That’s really not sufficiently long to outweigh concerns over defection and 5 or 6 years from now, Iran’s cost calculation will of course be even easier.

So, while it’s not the greatest agreement, it doe look pretty strong from an institutional perspective. It has multiple points to glean information about Iran’s intentions, it requires Iran to do things we already know it doesn’t want to do, and if Iran wants to renege, it will have to do so in clear breach of its agreement. Neither Iran, Russia, nor China will be able to block the dispute process from continuing to the end. Again, that doesn’t mean that Iran will indeed comply. But it does mean that any failure to comply will be obvious and unambiguous.

No agreement is going to be perfect, so the question I’m interested in is: Does the agreement help us get a clearer understanding of Iran’s intentions? As I read it, this agreement will help the US and its allies gain information about Iranian decisions and actions. It will get the IAEA into the country, establish full-time monitoring of the known facilities and technologies, and force Iran to break the agreement as a whole in order to block access to any specific site. If and when Iran decides to begin working towards a deployable bomb, the odds are significantly better that the US and its allies will know (Iran could, of course, build a secret facility that the IAEA doesn’t know about, but I can’t even envision the kind of agreement that could have prevented that). Even if it can’t stop Iran, that’s a better place than we are now.


UPDATE: As this article from Foreign Policy by a nuclear non-proliferation verification expert outlines, while the JCPOA may not be able to prevent Iran from developing a nuclear weapon, it will be sufficient to ensure that the US and the international community will know if Iran does so. In Acton’s words:

But, ultimately, it’s complex technical considerations that determine whether the JCPOA’s verification regime will prove effective. And, in the final analysis, the JCPOA does significantly enhance the ability of the IAEA to guard against sneak-out, the most likely pathway for Iran to acquire the Bomb. That’s not the only metric for assessing the deal — but it is a bloody important one.

This seems to mesh with the analysis I have advanced above.