Planet Money

Iran, protests, and sanctions

February 7, 2026

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  • Recent protests in Iran are fueled by a combination of human rights concerns, corruption, and severe economic hardship largely attributed to 47 years of U.S. sanctions. 
  • The history of U.S. sanctions on Iran has evolved through distinct phases, with the initial 1979 sanctions hardening the new regime's anti-Western economic identity, while later, more comprehensive sanctions (post-2010) caused significant economic contraction. 
  • U.S. sanctions are a double-edged sword: while intended to pressure the regime, they can inadvertently benefit powerful internal actors like the IRGC and create unintended consequences, such as over-compliance by global banks, hindering the U.S. ability to properly roll back sanctions as promised. 

Segments

Ali’s Observations on Iran
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(00:00:22)
  • Key Takeaway: Economic hardship is a primary driver of the recent protests in Iran, evidenced by rapid inflation like a 30% jump in egg prices during a short visit.
  • Summary: An individual named Ali observed significant changes during a recent visit to Iran, noting both small acts of defiance (women not wearing hijabs) and growing financial anxiety among the populace. The dire economic situation, including rapid inflation, directly contributed to the recent protests that began when vendors went on strike. Ali joined the protests, witnessing widespread participation and hope for revolution before the regime’s violent crackdown.
Sanctions and Protest Dynamics
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(00:03:42)
  • Key Takeaway: The current protests in Iran are fundamentally about human rights and freedom, but were triggered by economic pain largely caused by U.S. sanctions imposed over 47 years.
  • Summary: U.S. sanctions aim to push regimes toward change by infuriating citizens, and for a moment, it seemed they might aid the Iranian protesters’ goals. However, the regime responded with a violent crackdown, resulting in thousands of deaths and imprisonments, demonstrating the regime’s capacity to suppress dissent despite economic pressure. The younger generation is noted as being particularly fearless in these protests due to their bleak future prospects.
Defining Sanctions and Historical Context
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(00:07:54)
  • Key Takeaway: Sanctions are non-military tools restricting trade and capital to influence political behavior, but they are only effective under specific conditions, which U.S. sanctions on Iran have often failed to meet.
  • Summary: Sanctions are defined as restrictions on trade and capital used to influence political behavior without military force. Experts suggest they work best when communication is clear and the targeted country is not too integrated globally. The U.S. has imposed sanctions on Iran for nearly 47 years, aiming to stop nuclear pursuits and militia arming, with nearly every president since Carter participating.
First Moment: Post-Revolution Identity
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(00:09:15)
  • Key Takeaway: The initial U.S. sanction following the 1979 hostage crisis solidified the new Iranian government’s decision to adopt a protectionist economic identity explicitly forbidding foreign investment.
  • Summary: Political economist Iva Layla Pessaran’s research shows that the 1979 revolution was driven by rejection of foreign influence, particularly from the U.S. The 1979 embassy seizure and the subsequent U.S. asset freeze acted as a flashpoint, radicalizing the debate among new leaders. This led to the constitution explicitly forbidding foreign concessions, cementing an economic identity in opposition to the West.
Second Moment: 1990s Economic Opening
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(00:17:26)
  • Key Takeaway: Despite U.S. sanctions in the 1990s, Iran experienced a period of surprising economic growth and liberalization by increasing trade with non-U.S. partners and fostering a growing middle class.
  • Summary: Following the devastating Iran-Iraq War, Iranian leaders in the 1990s adopted surprisingly neoliberal policies to boost living standards, including lowering tariffs and attracting foreign investment. This liberalization worked, leading to GDP growth comparable to peers like Turkey, even while U.S. sanctions for terrorism and nuclear pursuits remained in place. Researcher Yar observed this vibrancy firsthand in 2013, noting local manufacturing and modern retail developments.
Third Moment: Comprehensive Sanctions (2010s)
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(00:22:48)
  • Key Takeaway: The comprehensive, internationally coordinated sanctions imposed around 2010 successfully caused Iran’s first major economic contraction in two decades by isolating its financial system.
  • Summary: The U.S. implemented staggered oil sanctions and peer-pressured over 120 global financial institutions to cut off Iran’s banking access, effectively forcing banks to choose between dealing with Iran or the U.S. dollar system. This isolation led to increased inflation, currency devaluation, and economic backsliding for Iran after 2012, causing public misery and leading to the election of a more moderate president who pursued the 2015 nuclear deal. The deal temporarily removed sanctions in exchange for nuclear rollbacks, appearing to be a triumph of negotiation.
Flaws in Sanctions Implementation and Effect
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(00:28:14)
  • Key Takeaway: The U.S. struggles to properly roll back sanctions due to a self-created ‘culture of over-compliance’ among global banks, and sanctions often benefit the sanctioned regime’s powerful internal factions.
  • Summary: After the 2015 deal, international banks refused to re-engage Iran because the U.S. had spent years convincing them of the risks, demonstrating an inability to properly undo the economic isolation. Furthermore, sanctions benefit the Islamic Revolutionary Guard Corps (IRGC), which controls an estimated 50% of Iran’s economy by eliminating international competition. The mechanism of sanctions relies on the ‘immiseration of its people,’ making them functionally similar to warfare due to impacts on basic needs like medicine.
Conclusion and Call for External Help
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(00:34:24)
  • Key Takeaway: Despite the suffering inflicted on ordinary citizens, some view sanctions as an effective tool to cripple the regime, but the Iranian people now demand external help to ensure the current uprising leads to lasting change rather than a return to the status quo.
  • Summary: Ali believes sanctions have weakened the brutal regime, justifying the pain felt by the people as a necessary cost. He stresses that after the violent crackdown, there is no going back to normal for the Iranian people. The protesters desire external help to hasten the end of the uprising and minimize further loss of life.