The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future

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DARE TO BE EMBARRASSED!

IT’S ALWAYS NEAT to think about what-ifs, to rewrite the past with the idea that we could have worked things out for the better. But thinking about how to rewrite history is one thing; thinking about how to write a script for the future is quite another. It’s so easy to get the past right when you already know what happened. And while examining alternative pasts is fun and informative, we still never get to find out whether we really could have derailed Sparta’s defeat or stopped Hitler in his tracks. Ultimately, solving a seventy- or eighty-year-old problem is fascinating, but not terribly useful outside of what it teaches us about the gaming process. Working out how to solve today’s problems, like stopping al-Qaeda dead in its tracks—now that would be useful. That’s why any predictioneer worth his or her salt must be willing to risk the embarrassment that comes from being wrong.

In this chapter we will look ahead a year or two from when I am writing this (in April 2009 for the case of Iran-Iraq relations and June 2008 for the Pakistan case). Here is where the rubber really meets the road. We will look at what the United States government could do to diminish the threat of terrorism or insurgency in Pakistan, and the likely relations to develop between Iran and Iraq if President Obama fully withdraws U.S. forces from Iraq or leaves fifty thousand in that country well beyond August 2010.

Back in the spring of 2008 and again in 2009 I taught an undergraduate seminar at NYU in which twenty terrific students in each class used my new forecasting model. This was a great opportunity for me (as well as, I hope, for my students) to find out how hard or easy it is to teach people with no prior experience how to become effective political engineers. Fortunately, my students were willing guinea pigs, and they did a great job.

The main idea behind this course, sponsored by NYU’s Alexander Hamilton Center for Political Economy, was to search for solutions to pressing policy problems based only on logic and evidence. That is the Center’s mission. It leaves no room for partisanship, ideology, opinion, anecdotes, or personal wishes when it comes to crafting solutions. Game-theory models, however, are a way to fulfill the mission. With that in mind, I asked my students to pick any foreign policy problem that intrigued them. They clustered themselves into groups and set to work on Pakistan, the Israeli-Palestinian dispute, global warming, nuclear proliferation, relations between Cuba and the United States, relations between Russia and the Ukraine, and many other critical policy concerns.

Each student studied a problem that he or she really cared about. They took the class knowing that they would use game theory to work out likely future developments and to write a script about how to improve the future from the perspective of any one of the players in the game. They had almost no prior experience with any of the material or models. They had limited access to experts, so they relied on the Internet and major news outlets to put their data together. I mention this to be clear that any hardworking, motivated person can replicate what they did. All this being said, my students used my new model, and I certainly reviewed their work—so any misses are the model’s and mine.

Okay, let’s see what they came up with, remembering that the first class began in January 2008 and had its last meeting on May 5, 2008, and that the second started in late January 2009 and ended in the first week of May 2009. Everything reported here was worked out during those months. No information has been updated or altered to take account of later developments. The students had no prior experience with my old forecasting model or my entirely different and more sophisticated new model. We met for two and a half hours each week in class. They made weekly presentations, got lots of feedback, and spent a fair amount of additional time with me in my office learning how to interpret the new model’s results. They also put in lots of additional time figuring out what questions to ask and how to frame them, assembling the data, and preparing their weekly presentations and final papers. Let’s have a look at what they found out.

PAKISTAN: WHERE HAVE ALL

THE SOLDIERS GONE?

The group that decided to work on Pakistan in 2008 was intrigued by three policy questions. They wanted to know how willing the Pakistani government was going to be to pursue militant groups operating in and around Pakistan, including al-Qaeda, the Pakistani Taliban, and the Afghan Taliban. They also wanted to investigate whether the Pakistani government would allow U.S. military forces to use Pakistani territory to launch efforts to track down militants. Finally, they wanted to forecast the level of future U.S. foreign aid to Pakistan and whether a higher or lower amount of aid was likely to change the Pakistani leadership’s approach to pursuing militants.

These are big questions that go to the heart of U.S. interests in Pakistan. While answering these questions, the students also uncovered answers to a bunch of other important and compelling issues.

By way of background, it is important to remember that when the students started their project, Pakistan was in the midst of a crisis. Benazir Bhutto, Pakistan’s former prime minister, had returned from exile in late 2007 as part of a deal she negotiated with Pakistani president Pervez Musharraf. She was expected to become the next prime minister following the general elections scheduled for January 8, 2008. Instead, she was assassinated on December 27, 2007.

The elections were postponed to February 18, 2008. Musharraf’s party was routed, while the parties of former prime ministers Bhutto and Nawaz Sharif, also recently returned from exile, won control of the national assembly (Pakistan’s parliament). Musharraf continued as president. Mrs. Bhutto’s husband, Asif Ali Zardari, became the new head of her party, the Pakistan Peoples Party (PPP), while the party of former prime minister Nawaz Sharif, the Pakistan Muslim League-Nawaz (PML-N), joined the PPP to form a coalition government.

Neither of the two victorious parties was a friend to Musharraf. He was in the awkward position of having to certify the new government, expecting that it was likely to impeach him as soon as it was certified. He had earlier fired the chief justice of Pakistan’s supreme court to prevent him from ruling on the legitimacy of Musharraf’s own reelection. The new government was expected to restore the chief justice and had declared its intention to depose Musharraf as soon as the PPP and PML-N came to power. It did not do so. Failing to get PPP support on this important issue, Sharif and the PML-N withdrew from the coalition on August 25, 2008. With pressure mounting from the United States to do something about the use of Pakistani territory as a base of operations for al-Qaeda and the Taliban, and with the Pakistani government itself deeply divided on how to move forward, the country was in turmoil and its future direction was extremely uncertain.

The situation seemed dire not only for Musharraf, but from the American perspective as well. For all of his limitations, Musharraf was an important ally in the war on terror. He had literally put his life on the line by siding with the United States against the Taliban government in Afghanistan after 9/11. By 2007, however, his support seemed to waver. He turned greater authority over the pursuit of militants to local tribal officials along the Afghan-Pakistani border, reducing the role of the Pakistani army. From the American perspective, this hurt the prospects for continued success against the terrorists. Musharraf argued that it would prove beneficial because the locals knew the situation on the ground infinitely better than any outsiders and they had the local clout to get things done. (My own view was that this was a move by Musharraf to extract more economic and military aid from the United States by threatening to allow the situation to deteriorate if the aid was not forthcoming. It’s important to note that my students knew nothing about my personal view.) Although very much his own man and hardly perfect in American eyes, Musharraf was nevertheless the United States’ best source of help in the effort to defeat al-Qaeda and the Taliban. The new government in parliament, in contrast, spoke openly of finding a way to negotiate with the groups identified by the United States government as terrorists.

So what did my students find out? Their analysis showed that the PPP would have even greater policy influence relative to Sharif’s PML-N than the PPP’s advantage in National Assembly seats implied. This was not particularly surprising, but then, if a model only produces the unexpected, we should be suspicious of it. Why wasn’t it surprising? To start with, Sharif did not personally compete in the February election. That left his party without strong leadership in the National Assembly. When he finally decided to run in a by-election, the courts ruled that he was not eligible because of his earlier conviction on corruption charges when he was prime minister. It was, in fact, his earlier corruption case that had sent him into exile in the first place. That aspect of my students’ analysis merely confirmed what any Pakistan watcher already knew. Sharif was not as popular as Bhutto, and neither was his political party as popular as hers. With her assassination the PPP gained even greater influence, riding the crest of an upsurge in sympathy for her, her political movement, and her vision for the future.

What was surprising, and distressing, was the pattern of evolving power among the national leadership that emerged from the analysis. While capturing the conventional wisdom about the relative power of the PPP and the PML-N, they also found a solid answer to a pressing question. Many Pakistan watchers speculated on whether the new leadership in the National Assembly would make a deal with hard-liners. None, as far as I know, had dared to quantify what that might mean in terms of the future distribution of political power in Pakistan and its implications for shaping policy.

The predictions my students made, based on game-theory logic and the data they amassed to seed the model, can be seen in the figures that follow. The first addresses Musharraf’s potential to survive the election’s outcome and the conditions that ultimately would lead to his ouster. At the time their study was done, I think it is safe to say, most people believed Musharraf was finished. A few speculated on whether the United States would somehow save him, but most thought he would be political history right after the February 2008 election. “Not so fast,” said my students’ results.

Figure 10.1, on the next page, tells the story of what could have been and of what was to be. If the two parties in the government, Zardari’s PPP and Sharif’s PML-N, had been willing to work together, then figure 10.1 shows us that Musharraf could indeed have been ousted in March or April 2008, just as the pundits expected. The government parties’ combined power—the heavy solid line in figure 10.1—overtakes Musharraf in the period between March and April. That would have been the opportunity to kick him out, as expected by most Pakistan watchers. But the model tells us that the PPP and PML-N were not willing to work together at that time. The model shows that Sharif believed throughout this period that he could pressure Zardari and his party into doing just what Sharif wanted. The model also tells us that Sharif was wrong. According to the model’s results, Zardari saw no reason to listen to Sharif since the PPP had substantially more clout than Sharif’s PML-N. As we know now, rather than work together, Sharif threatened to withdraw his support for the government in May 2008, because Zardari was unwilling to commit to deposing Musharraf.

FIG. 10.1. How Long Could Musharraf Be Tolerated?

But figure 10.1 tells a more complete story than just that. We can also see that the model projected that Zardari’s PPP (the dashed line in the figure) on its own, without help from Sharif, would surpass the declining Musharraf in power by June or July 2008. At that point, the PPP didn’t need anyone’s help to dump Musharraf. They had the clout to do it on their own. (We now know that they in fact did push him out in August 2008 and that Zardari assumed Musharraf’s role as Pakistan’s president.)

So while the world’s media were counting Musharraf out in February, the students successfully forecast that the divide between the PML-N and the PPP would allow Musharraf to hang on for about six months past when they began their study. But even this is but a small part of the big emerging story played out in advance by modeling key Pakistani policy issues. Figure 10.1 compares the power of only three of many players in Pakistan’s political game. Let’s see what the picture looks like when we throw in the main potential threats to Pakistan’s civil, secular government. I have in mind al-Qaeda, the Pakistani and Afghani Taliban, and even Pakistan’s military, with its long history of coups against civilian governments.

Figure 10.2 tells an incredibly distressing story for any who hold out hope for stable democracy in Pakistan. Pakistan’s Taliban and their Afghan compatriots work together as one, so I present them as if they are one. Looked at this way, they are far and away the most powerful force within Pakistan. And al-Qaeda is next in line according to the model, at least after April 2008, when their power is projected to surpass the government’s. Al-Qaeda just continues to grow and grow. Together with the Taliban they constitute the emerging dominant source of political influence in Pakistan, with only outside influencers like the United States or the Europeans being possible counterweights. Remember, we are plotting power—political influence weighted by salience—based on information known (or at least estimated by my students) back in January 2008 and not after. Yet here is the headline from the New York Times lead story on June 30, 2008, months after the analysis was done: “Amid U.S. Policy Disputes, Qaeda Grows in Pakistan.” The story goes on to say “it is increasingly clear that the Bush administration will leave office with Al Qaeda having successfully relocated its base from Afghanistan to Pakistan’s tribal areas, where it has rebuilt much of its ability to attack from the region and broadcast its messages to militants across the world.” My students were able to foresee this troubling prospect half a year ahead of the New York Times. Maybe they could have done so even earlier; remember, they only assembled their data in January 2008, when the course, Solving Foreign Crises, began. They saw this result immediately.

FIG. 10.2. Who Will Have the Clout in Pakistan?

There is one other troubling feature to figure 10.2. Other parts of the model’s output tell us that al-Qaeda and the Taliban will try to negotiate an arrangement with the PPP and the PML-N. Sharif’s PML-N is modestly more open to such talks than is Zardari’s PPP. Both prefer to live with the existing status quo vis-à-vis the militant groups while trying to consolidate their own hold on power. In the meantime, the Pakistani military sees itself slowly but steadily losing influence. Such a circumstance raises the prospect that they will try to stem the tide against them by launching a coup to take control of the government. The optimal period for them to take such a step is projected to be between February 2009 and July 2009. Earlier than that they see no need, and later may be too late for them. Pakistan’s fragile democracy appears likely to be under assault from the militants who would establish a nondemocratic fundamentalist regime on one side, and from the army that would establish a military government on the other.

What does this mean about Pakistan’s contribution to the war on terror? Will they make a more vigorous effort to pursue militants and stamp them out, or will the Pakistani government succumb to the projected growing influence of al-Qaeda and the Taliban? I think you can guess the answer. But just in case you can’t, figure 10.3 tells that story.

The status quo commitment to go after al-Qaeda and the Taliban back when my students began their project was at 40 on their issue scale. A value of 40 meant some real efforts to contain the militants but falling well short of trying to stamp them out as the United States wanted. That was equivalent to a score of 100 on the scale. The status quo, with some erosion, was close to the policy predicted to hold, more or less, until the summer of 2008. A position of 0—al-Qaeda’s position (not shown)—meant “Do nothing against the militants.” With that in mind, let’s see what we predict for the future.

FIG. 10.3. Who Will Urge Pakistan’s Pursuit of Internal Militant Groups?

The dashed line and the dotted line in figure 10.3 show the predicted positions of Zardari’s PPP and Sharif’s PML-N, respectively. After June 2008, their approach is projected to be little more than rhetorical opposition to the militants with almost no serious commitment to go after them. Talk about a balloon bursting. The air just pours out of the antimilitant effort. That puts responsibility for going after the militants squarely in the United States’ corner.

Throughout the remainder of his term, President Bush is adamant (but ineffective) in his commitment to persuade the Pakistani government to go after the hard-liners. After the summer of 2008 even he pretty much gives up on this strategy. Instead, my students found that the U.S. approach will shift ground. The United States’ two-pronged strategy of clandestine American pursuit and open Pakistani pursuit of militants will be replaced by a much greater emphasis on the (perhaps clandestine) use of the American military directly within Pakistan. Even that commitment, the student projections indicate, will collapse shortly after the American presidential election. The new president is not likely to do much of anything about the rise of terrorist influence within Pakistan at least through the end of 2009, when the student projection ends. It seems that after a new president is inaugurated—of course, we now know that the president is Barack Obama, but back in the spring of 2008, neither my students nor the model made assumptions about the American election—the war on terror will not be effectively focused within Pakistan.

We just had a brief sketch of the major findings regarding Pakistan. There is much more detail that could be discussed about how and why these results arise, but the more interesting question is “What is to be done?” Recall that my students also studied U.S. foreign aid to Pakistan and its likely impact on Pakistani policy. They estimated the current level of U.S. economic assistance to Pakistan in fiscal 2008 as $700 million. That was an approximation, but probably a reasonable one. (The true amount is surely a mix of public and secret information.) They then looked at how congressional and presidential support for that number would change over time, taking into account domestic pressures and the pressures within Pakistan. Here is what they found.

The analysis shows that substantial domestic political pressure is likely to push for cuts in American aid to Pakistan. President Bush and the Democratic Congress are predicted to move apart at least through the summer of 2008 (remember, the data are from January of that year). Indeed, by early summer, the projection was that the president would be pressing for Congress to increase annual aid to Pakistan from $700 million to around $900 million to $1 billion. Did he? Bush proposed shifting an additional $230 million in counterterrorism funds during the summer of 2008. The model predicted that Congress would hold the line on aid during that same period, and they did. Congress has complained in actuality about the amount of aid the United States is giving to Pakistan, but more on that in a moment. After the summer of 2008 the analysis reports that while the president continues to advocate greater aid than Congress supports, the two begin to converge slowly. Both conclude that aid just isn’t buying the policy compliance the U.S. government wants.

Put bluntly, American foreign aid is supposed to pay the Pakistani government to go after the militants. It is failing. Indeed, by June 2008 the public discussion coming out of Congress alleged that Pakistan was misusing U.S. aid funds. Money was being spent on items like air defense with Bush’s support even though al-Qaeda and its allies in Pakistan are not known to have any air capability. Air defense might be helpful for Pakistan against a threat from, say, India. So, while administration officials countered that the impact of aid on Pakistan’s antiterrorist efforts was being underestimated, Congress made the case that the money was being thrown down a rathole.

It is not hard to see that, as projected by my students’ analysis, President Obama will face real pressure to support less aid for Pakistan. My students worked through the implications of their assessment and they despaired. Their analysis convinced them that al-Qaeda and the Taliban were getting stronger and that U.S. reluctance to increase aid was more likely to reinforce that trend than reverse it. It was clear from their investigation that the United States cared deeply about getting Pakistan’s help in tracking down and neutralizing militants and terrorists operating within Pakistan’s borders. It was equally clear that Pakistan’s government leaders (the PPP, Sharif and his PML-N, and Musharraf’s backers in the military) wanted much more U.S. aid than they were receiving. They could see that the then current U.S. policy did not provide either a sufficient carrot or a painful enough stick to convince Pakistani leaders to put themselves at risk by going after the militants.

With these observations in hand, my students began to think about how they might go beyond predicting developments to trying to shape them (or at least simulate doing so). And so they initiated a search for a strategy that might get Pakistan’s leaders to make a more serious effort to rein in the militants. They looked at the possibility of trading aid dollars for policy concessions. Seeing that the Pakistanis want more money and the United States wants greater efforts to track down militants, they wondered whether an aid-for-pursuit deal might not improve the situation from the American and the Pakistani perspectives.

Using foreign aid to secure policy compliance is a time-honored use of such funds even if, at the assumed $700 million in economic aid, it did not seem to be working in Pakistan. Looking at their assessments, my students could see why Pakistan’s leaders were not aggressively pursuing militants despite the then U.S. aid program for Pakistan. They could see that the leadership (Musharraf, the PPP, and the PML-N) expected to take too much political heat from al-Qaeda and the Taliban for it to be in their interest at the prevailing foreign aid level. And so my students set out to analyze how that might change if the United States gave significantly more aid than their analysis indicated was going to be the case. Figures 10.4A and 10.4B show the same projections through the end of President Bush’s term, but then they diverge. Figure 10.4A continues to forecast the relative influence of the U.S. government and the militants in Pakistan through the end of 2009 if President Obama follows the foreign aid course pursued by the Bush administration. Figure 10.4B assumes that Obama follows the course recommended by my students (and also by his now vice president, Joseph Biden), equal essentially to doubling U.S. aid.

As is evident from the figures, continuing the current aid policy is a losing proposition. With 2008 aid levels, the United States maintains a small power advantage over the militants during Obama’s first year in office. That advantage virtually disappears by the start of 2010. The picture is entirely different if the United States and Pakistan strike a deal that trades dollars for aggressive pursuit of al-Qaeda and the Taliban. Rather than coming out of the chute looking to make a deal with the militants, the National Assembly leaders confront the Taliban and al-Qaeda. They impose heavy political and material costs on them and bear heavy costs in return. With the Pakistani government motivated by a doubling of aid dollars, the Obama administration increases U.S. clout in Pakistan at the direct expense of the militant groups (including al-Qaeda, the Taliban, and elements sympathetic to them within Pakistan’s intelligence service, the ISI). According to the model’s logic and evidence, we can fundamentally change the lay of the land in Pakistan, but to do so, we need to be responsive to the interest Zardari’s government has in getting its hands on more money. They won’t take the heat against the militants without it. No doubt some of that money will be stolen by corrupt officials, but that’s the point. They will want to continue the flow of dollars, and the only way they’ll succeed at that is by helping the United States against al-Qaeda and the Taliban.

It is evident from my students’ analysis that a promise of greater efforts to go after militants will accompany an increase in U.S. aid. This, however, leaves two questions to be answered: How did we arrive at the idea that doubling aid is the optimal aid-for-pursuit deal, and will each side to such a deal follow through and show that they are really committed to it? My students answered the first question but didn’t have enough time to analyze the second, so I will do so here. But first, how do we work out what the optimal aid package looks like?

FIG. 10.4A & B. Reining in Pakistan’s Militants by Doubling Foreign Aid

Back in Game Theory 101, I introduced a way to look at how players resolve trade-offs across issues. In that chapter we were examining the notion of the national interest and saw that there were lots of ways to put a winning electoral coalition together, some of which supported freer trade and others fairer trade, some of which endorsed increased defense spending and others reduced spending. Now, using my students’ analysis, we can build on their solutions to the game and apply that methodology—known as win-sets—to their simulated results to evaluate the maximum pursuit that the United States can get from the Pakistani government and the cost in aid dollars to get that maximum pursuit.

Figure 10.5 plots the preferred policies on aid and pursuit of militants held by Pakistan’s leadership and the average of the preferred foreign aid package supported by Congress and the president (and their shared view on pursuit of militants) around July 2008 against the predicted status quo on these two dimensions at that time. July 2008—roughly when Musharraf was predicted to be deposed and a new, PPP-dominated regime was expected to take over—is chosen as a prominent early opportunity to strike a deal that trades aid dollars for pursuit of the militants. The solid gray petal-shaped area in the figure shows the range of aid packages and levels of pursuit that are improvements over the status quo from the U.S. government’s and the Pakistani government’s perspectives. Different points within this gray area show different mutually acceptable trades between aid money and efforts to take down the militants. The optimal deal is in the top right corner of the petal. At that point the United States extracts the maximum effort by Pakistan’s leaders against the militants, and the Pakistanis in turn extract the maximum amount of money they can get. More money buys no additional commitment to go after the militants, and greater effort against the militants extracts no additional dollars. That is true because policies outside the petal are not mutually beneficial relative to the status quo, since policies outside the petal are farther from what one or the other set of players wants relative to the fallback position that is the status quo.

So what is the optimal deal? The horizontal arrow in figure 10.5 shows the amount of foreign aid that secures the greatest effort to pursue militants by Pakistan’s leaders. That amount is $1.5 billion for 2009. The vertical arrow identifies the maximum effort in pursuing militants that secures $1.5 billion in U.S. aid. That level of pursuit is equivalent to about 80 on the pursuit scale. That is, my students found that for $1.5 billion in aid it is very likely that Pakistan’s national assembly, its president, and other important players would really go after the terrorist threat emanating from their country. That is a bit more than double the aid estimated for 2008 and many times the amount advocated by the president or Congress at the outset of the new president’s term (according to the model-based analysis). It requires a marked change in U.S. policy.

FIG. 10.5. Aid Dollars Can Buy Great Pursuit of Militants

What would it buy? Put in terms of the issue scale, if the Pakistani leaders get $1.5 billion in U. S. aid, their pursuit of militants will be far above the status quo score of 40 as of January 2008, but it will not equal the intense pursuit identified with a score of 100. That was the level the Bush administration and Congress wanted and surely is the level any American president will desire. So we won’t get 100, but we certainly will get a lot more than what is projected without this infusion of money. But please don’t get me, my students, or the analysis wrong: the Pakistani government is unlikely to completely quash the terrorist threat just for money. They are no fools. They know that the money will dry up if al-Qaeda and the Taliban are destroyed. So for money they will rein the threat in and reduce it (that’s 80 on the scale) but not utterly destroy it (that would be 100 on the scale). For their own political survival they will do whatever it takes. They will try to wipe out the militants if that is their best political path, but if making a deal with the hard-liners looks politically best for Pakistan’s leaders, then that is what they will do. A billion and a half dollars would go a long way to convincing them that they are better off going after the militants, insurgents, and terrorists than accommodating them.

Of course, if an aid-for-pursuit deal is struck, each side will have to feel confident that the other side will not renege. Pakistan’s leaders must believe that aid dollars will continue to flow, and Congress must believe that, having received the money, Pakistan’s leaders will not turn around and still make a deal with the militants. The latter may be of especially great concern because even with an aid deal, al-Qaeda’s clout, although diminished, still continues to be substantial, as projected in figure 10.4B. What the model shows is that the leadership in the national assembly will sustain pursuit of militants at around 75—80 on the scale, round after round after round. With the aid deal buying so much greater an effort to combat terrorists within Pakistan, Congress and the president are expected to remain steadfast in their commitment to the proposed aid agreement. All parties to the deal show a real commitment to sustain it, each for their own political benefit.

Without the huge infusion of aid funds from the United States, I’m afraid the projected future is that Pakistan’s leaders will make a deal with the militants, who will become a legitimate part of policy making in Pakistan, or that country’s government will face another military coup. In all likelihood, American interests will decline and be thwarted. Too bad that this is what’s likely to happen. A billion five is a cheap price to pay to stabilize a civil, secular Pakistani government.

IRAN AND IRAQ: IS THERE A MARRIAGE MADE IN HEAVEN?

The future my students projected for Pakistan back in 2008 was grim. The reality a year later is at least as grim. Looking back over their predictions—some about things that have now happened and others about events yet to come—it seems that their play of the predictioneer’s game has proven depressingly accurate. Sometimes it really would be better to get things wrong.

Now, in the spring of 2009, we have another chance to test the game. Let’s grab that chance and see where it takes us. Just a hop, skip, and a jump away from Pakistan and all its troubles, Iran and Iraq are facing an uncertain future. That uncertainty provides a golden opportunity to dare again to be embarrassed. You see, as I write this in early April 2009, I am again teaching the course on solving foreign crises that was used in 2008 to predict Pakistan’s stability (or, more precisely, its instability). Two excellent students in my 2009 course have put my model to good use, looking into the future relations between Iran and Iraq. In doing so, they have uncovered some pretty important insights about likely political developments in each of those countries. Their starting point—Will Iran and Iraq forge a strategic partnership?—illuminates a debate at the heart of two entirely different perspectives on American foreign policy: Should the U.S. government keep troops in Iraq, as President Obama proposes to do, or should we pull out altogether? The predictioneer’s game can help answer that question.

Let’s review a few critical facts before plunging into the analysis. Back before the November 2008 presidential election, candidate Barack Obama promised to withdraw American troops from Iraq within sixteen months. On February 27, 2009, ensconced in the White House, Obama stretched his pre-election withdrawal timetable a little bit, to August 2010. That did not seem to have elicited any great controversy either among “pro-war” Republicans or “anti-war” Democrats. But when he announced the timing of the U.S. withdrawal, he also declared his intention to keep fifty thousand American troops in Iraq. That’s no small, token force. It is, in fact, 36 percent of the total number of U.S. soldiers in Iraq at the time he announced his policy. Not too surprisingly, he was subjected to plenty of complaints within the ranks of the Democratic Party for moving too slowly on pulling U.S. forces out of Iraq altogether. Predictably, he also got scant praise in return from the Republicans. Politics is not a warm and cuddly business. Obama took additional heat because these combat-ready troops are slated to stay in Iraq at least until 2011, when a pre-existing agreement with the Iraqi government calls for a full withdrawal. Of course, the possibility remains that the 2011 deadline could be extended indefinitely.

The decision President Obama made in February 2009 and the reality he will face in August 2010 may look alike, and they may not. Pressure within his own party and changing circumstances on the ground might result in a decision to keep far fewer troops in Iraq. But of course it is also possible that President Obama will stick to his guns (fifty thousand of them). I am not going to try to resolve here which he will do, but I am going to use the predictioneer’s game to resolve which he ought to do. The answer will not depend on my personal inclinations or those of my students; I certainly don’t know what they favor. I had barely given this question any thought myself before doing the analysis.

Of course, this investigation touches on only a few aspects of the policy implications of keeping U.S. forces in Iraq or withdrawing them. Facets of American security not examined here may also be influenced by the U.S. decision to pull out of or stay in Iraq. For instance, the troop decision also might make a difference in which way Iran heads in its pursuit of a nuclear capability. But I do not tackle that issue here. I will just say that the prospects of resolving that country’s nuclear threat are sufficiently good (based on earlier analyses I have done on Iran) that I do not believe a continued, greatly reduced American military presence will materially tip the resolution of the nuclear issue one way or the other.¹

WHY MIGHT IRAN AND IRAQ WANT TO BE PARTNERS?

Pulling American troops out of Iraq is predicated on the idea that by the summer of 2010 Iraq will be able to defend itself against internal and external threats to its security. The Iraqi leadership must, of course, be mindful of the giant white elephant on its border as well as the potential of resurgent insurgents at home. One way to cope with its giant neighbor, Iran, is to forge close ties between the two countries. With that possibility in mind, let’s think about the range of deals Iran’s Shi’ite theocracy might strike with Iraq’s secular but Shi’ite-dominated government. As we contemplate a possible Iraqi-Iranian partnership, we must keep in mind that relations between Sunni and Shia Muslims are often extremely fractious, and more so in countries like Iraq, where both groups make up a substantial segment of the population.

Iraq’s population is divided roughly 65 percent to 35 percent between Shia and Sunni Muslims, and many followers of the two factions hate one another. That divide certainly was a major factor that gave rise to Iraq’s insurgencies and the U.S. creation of those CLCs we talked about in Game Theory 101. During the insurgency, many Shia residents in Sunni areas were driven from their homes, and sometimes murdered on sight, by local Sunni militias. Likewise, Sunni residents in Shia-dominated communities were driven out or murdered. Although things are calmer now and some people have returned to their homes, many have not and animosities linger just beneath the surface, ever ready to explode at the first sign of provocation.

Unlike Iraq, Iran does not have much of a domestic Shia-Sunni problem. That’s not so surprising. After all, Sunni Muslims are in scarce supply in Iran. There are about ten Shia for every one Sunni in that country. That is, however, not to suggest that Iranians are warmly disposed or even indifferent to the Sunni branch of Islam. Iran has certainly had more than its share of contentious relations with Sunni-dominated governments in the Middle East and in the wider Islamic world. Most notably, Iran had terrible relations with Iraq during the long years in which the latter was run by Saddam Hussein. Iran and Iraq fought an eight-year war that killed more than a million people and saw the extensive use of chemical warfare. Few in Iraq or Iran have forgotten, and fewer still are likely to forgive, so building bridges between these two countries will not be an easy matter. Staying apart, however, carries its own considerable share of risks.

The Shia-dominated Iraqi government headed by Prime Minister Nuri al-Maliki sees Iran as a potentially sympathetic and like-minded ally. In contrast, he and his closest Iraqi followers may consider their own Sunni brethren a threat to their regime and their vision for Iraq’s future. Maliki surely wants to shore up Iraq’s security and, according to the data my students assembled, he sees forming a strategic alliance with Iran as the way to do so once the U.S. reduces its military presence or pulls out altogether. His starting position on the partnering issue described in the table on the next page is at 80. That means getting Iran to guarantee Iraq’s security. Such an assurance would provide a credible military threat from Iran against any anti-Shia rebellion in Iraq. That could be just the insurance the Maliki government needs.

THE IRAN-IRAQ PARTNER’S GAME

Position

Meaning

Detailed Implications for Iran-Iraq Relations

100

Full Strategic Partnership

Free flow of arms and military technology; a mutual defense alliance; joint intelligence operations

80

Concentrated Partnership

Restricted flow of arms and technology; some intelligence sharing; an alliance in which each guarantees to defend the other

50

Restrictive Partnership

Limited arms flow; no technology transfer; no shared intelligence; each promises not to use force against the other

20

Minimal Partnership

Considerable restrictions on arms flow; no signed alliance agreement at all

0

No Strategic Partnership

No flow of arms or technology; the two governments reaffirm their commitment to the Algiers Accord

²

Putting such a partnership together, however, will not be easy. Besides the usual complexities behind any international negotiation, it is likely that the U.S. government will present stiff diplomatic opposition to such a move by Iraq. Besides pressure from Obama, we can be confident that those who represent Iraq’s Sunni interests will also strenuously oppose any deal with Iran. As for Iran, a deal with Iraq would advance Iran’s ambition to become the dominant regional power, but the Iranian government will have to ponder the risks of associating closely with a regime that could fall into Sunni hands. The partnership issue seems especially well suited to evaluating whether the United States is better off keeping some troops in Iraq or removing all of them. Iran, after all, is hardly the state Obama would like to see exercise real influence over Iraqi policy, and a partnership between the two countries could have exactly that consequence.

The table tells us there’s quite a range of possible future relations between Iran and Iraq, and of course we need to play the game to work out what is likely to happen. From Barack Obama’s vantage point, Iraq ought not to be too quick to jump into bed with Iran. He thinks a policy around 0 on the scale is just right. That is, the Obama administration wants the two countries to go their separate ways while maintaining quiet at the borders, as is their obligation under the terms of their 1975 treaty. But that is not what Prime Minister Nuri al-Maliki wants. He advocates a concentrated strategic partnership (80 on the scale). Maliki’s government needs a protector; if it won’t be the United States, he would be content to obtain security guarantees from Iran. For him, forging a close association with his much larger neighbor makes a lot of sense. Left to his own devices, Maliki would choose a path that is opposite to the one President Obama wants. Of course, neither Maliki nor any future Iraqi leader will be left to his own devices. There’s plenty of pulls and tugs on all sides, so we really do need a tool, like game theory, to help us sort out what the future holds.

While President Obama urges Prime Minister Maliki not to make a deal with Iran, the expert data going into the game indicates that Iran’s Ayatollah Ali Khamenei—the supreme leader with a veto over all Iranian policy—welcomes an opportunity for an even closer relationship than Maliki desires. He, too, wants a mutual defense agreement, but he also wants an almost unrestricted flow of intelligence and arms dealing between his government and Iraq’s. It appears that Khamenei would like to use Iraq as a base for gathering information about the goings-on in the Arab states next door and beyond. So there is a substantial difference between Obama’s vision for Iran and Iraq and the ambitions of the leaders of those two countries.

WHAT WILL IRAQ OFFER TO IRAN?

With this bit of background in mind, we can ask what is likely to happen under two plausible scenarios: (1) Iran and Iraq first work out their respective positions through the normal internal give-and-take of domestic politics and then, having resolved the stance they will take, negotiate against the backdrop of ongoing U.S. pressure in the form of a continuing fifty-thousand-strong American military presence in Iraq; or (2) they each settle their domestic games and then negotiate their future relations bilaterally, without outside interference and with American forces fully withdrawn.

Figure 10.6A displays the evolving positions of four key political figures in Iraq: Prime Minister Maliki; vice president and leading Sunni politician Tariq al-Hashimi; Iraq’s President Jalal Talabani, who leads Iraq’s Kurdish faction; and Muqtada al-Sadr, the militant anti-American Shi’ite leader. The analysis on which the figure is based assumes that the United States will fully withdraw its troops by August 2010, an outcome favored not only by many Americans but also by many Iraqis. Figure 10.6B displays the same key Iraqi political leaders, but this time having solved the game under the assumption that the United States will maintain fifty thousand combat-ready forces in Iraq. The analyses are not precise about when Iraq’s leaders will come to a stable point of view on dealing with Iran, but they do imply that a decision will be reached not much later than August 2010—and quite possibly earlier. The issue appears to be on the back burner for now but it will surely heat up as the U.S. withdrawal date draws nearer.

The model shows that it takes six or seven bargaining rounds before Iraq’s political interests (including many more than the four leaders displayed in the figures) come to an agreement on how to deal with Iran. That is a large number of rounds before a stable outcome can emerge. So many rounds of internal discussion imply a long stretch of time between when the issue moves to the front burner and when it is settled internally. Apparently it will not be easy for the Iraqis to work out what they want their future relationship with Iran to look like.

FIG. 10.6A. The Likely Iraqi Approach to Iran If the United States Pulls Out

Figures 10.6A and 10.6B, viewed together, tell an interesting story. Despite their deep differences, Maliki, Talabani, and Hashimi slowly but surely come around to a collective agreement. They will support a relatively lukewarm relationship with Iran, a relationship not nearly as close as Maliki wants. According to the game, Iraqi diplomats will be authorized to seek an agreement with Iran that includes limited arms flow between the two countries, with no preparedness to transfer technology or share intelligence. In terms of a formal treaty relationship, what is likely to be sought is a promise from each not to use force against the other. That means, in the parlance of international affairs, that Iraq seeks a mutual nonaggression pact. The United States ultimately will support this undertaking, but only after a protracted negotiation. If U.S. troops remain in Iraq, Talabani will feel emboldened to press for an even weaker association with Iran, but he will not prevail. He will go along with Maliki’s compromise position if U.S. troops are withdrawn.

FIG. 10. 6B. The Likely Iraqi Approach to Iran If the United States Keeps 50,000 Troops in Iraq

There is one more element in Figures 10.6A and B that is strikingly important. Muqtada al-Sadr, the militant Shia cleric, steadfastly opposes the pursuit of a watered-down, weak partnership with Iran. In the absence of a U.S. military presence, he does not budge from his initial point of view. That perspective favors almost the most extreme partnership anyone advocates. Indeed, as we will see, only some Iranian leaders—like Ahmadinejad—want as much. Sadr advocates a free flow of arms and military technology between the two countries, accompanied by a mutual defense alliance and joint intelligence operations. He will back ever so slightly away from that extreme position if the United States retains troops in Iraq, presumably out of concern for the security of his own operations.

IRAQ’S POLITICAL WINNERS AND LOSERS

Before leaving the internal decision making in Iraq for a look at the comparable domestic evaluation of choices in Iran, we would do well to inquire about who will be Iraq’s political winners and losers on this big question of partnership with Iran. Figure 10.7A displays the predicted changes in political influence for Maliki, Hashimi, Sadr, and Talabani if the United States fully withdraws. Figure 10.7B evaluates the same power question if Obama leaves fifty thousand combat troops in Iraq.

FIG. 10.7A. Changing Power in Iraq If the United States Withdraws Completely

Even a cursory glance at the projected changes in political power in Iraq suggests that Prime Minister Maliki will need a deal with Iran’s Ayatollah Khamenei more urgently if the United States pulls out than if Obama proves true to his word and keeps American soldiers in Iraq. Figure 10.7A indicates that after months of rising political clout, Maliki’s influence will start to decline around late spring or early summer 2011. Meanwhile, Hashimi’s power will rise steadily. Without a substantial U.S. troop presence, the game indicates that sometime around early to mid-2012 Hashimi will be almost dead even with Maliki in clout. Conversely, if the United States retains a large contingent of combat-ready troops, while Hashimi’s growth in power is unabated, Maliki’s power does not go into decline. He remains considerably more powerful than his Sunni political rival. Since Maliki has shown himself willing to cooperate with the U.S. government and Hashimi mostly has not, a continued troop presence may be important to prevent Hashimi from becoming a bigger player than he already is. Maliki may want to reconsider the 2011 deadline for a complete U.S. troop withdrawal.

FIG. 10.7B. Changing Power in Iraq If the United States Keeps 50,000 Combat Troops There

With fifty thousand American soldiers in Iraq, Sadr’s political future looks much worse than if the United States withdraws. To be sure, the assessment derived from the game indicates that Sadr is entering a period of decline either way, but his downfall is steeper if President Obama resists the pressure to withdraw. President Talabani is also on the way down either way, but he falls faster and farther if the United States pulls out. That is a rather unfortunate combination of circumstances because Sadr is openly hostile to the United States and Talabani views the United States as an important ally.

The really big story in Iraq, however, takes us back to the changing fortunes of Hashimi and Maliki, especially if the United States pulls all of its forces out of Iraq. As I mentioned, Maliki is a reasonably reliable friend. He understands the brazen pursuit of his self-interest; he will just as quickly make a deal with Iran if the United States pulls out as he will make nice to the United States if American troops remain in place. He’s got his finger in the wind and he is working out who will do the most to be his guardian angel. The big risk in his political life is being ousted from office; the major domestic threat to his continued hold on power clearly comes from Hashimi. Hashimi wants Iraq to have nothing to do with Iran. Furthermore, he wants to reverse the government’s policy of de-Baathification; that is, he wants an end to the ongoing exclusion of former Baathists (Saddam Hussein’s party) from the government. And Hashimi staunchly opposes a federal structure for Iraq. Federalism is seen by many—most notably Vice President Joseph Biden—as the most promising means to avert civil war. Thus a political struggle along the Shia-Sunni (Maliki-Hashimi) divide is likely to cast a huge shadow over Iraq if U.S. forces are withdrawn. It is a much smaller shadow with U.S. forces on the scene.

With Maliki’s power slipping while Hashimi’s rises under the withdrawal scenario, there seem to be only two ways things can go—and neither is good from the U.S. perspective. Maliki can enter into a power-sharing arrangement with Hashimi. That would significantly strengthen the central government and assuage many Sunnis, two good things, but it might also open the door for the Baathists to regain control, a potentially very bad outcome indeed. After all, the projected power in the absence of the United States shows Maliki and Hashimi almost dead even and with Maliki on a downward spiral while Hashimi is ascending. Maliki, fearful of just such a takeover by Baathists, might opt for the second solution to the threat to his power. Rather than sharing leadership with Hashimi, he might call on Iran to step in and help defend his regime against a nascent Sunni-led insurgency or civil war. That, of course, would be an awful outcome for just about everyone except the Iranian leadership.

IRAN-IRAQ PARTNERSHIP

The feasibility of Iran’s army being invited in to help shore up Maliki’s regime against a Sunni threat depends, of course, on the nature of the deal the two countries will strike. The internal dynamics in Iran lead quickly—after just three rounds of domestic give-and-take—to a decision on how Khamenei should deal with Iraq in trying to forge a partnership. He will seek a full strategic partnership. Once each country has resolved its own views on partnership, it will be time for the respective negotiators to come together to discover whether they can find common ground for a deal. Figures 10.8A and B show what is likely to emerge from bilateral Iran-Iraq negotiations if the United States has pulled out militarily or keeps fifty thousand troops on the ground. The pictures tell radically different stories. Without U.S. troops present, Maliki and Khamenei quickly come to terms. If American forces are on the scene, it looks like the negotiations will be abandoned—or at least tabled—well before an agreement is reached. Indeed, the game suggests that the two governments will not have come to terms with each other even after more than two years of negotiations, if and only if Obama maintains a fifty-thousand-strong combat contingent in Iraq.

FIG. 10.8A. Iran-Iraq Negotiations After the United States Withdraws

FIG. 10.8B. Iran-Iraq Negotiations If the United States Does Not Withdraw

Figures 10.8A and B depict the policy positions of the two principal decision makers—Khamenei and Maliki—during the course of bilateral negotiations, but the figures also show the evolving policy stances of the most extreme elements with real clout in each country. Thus we see the near polar-opposite positions of Iran’s President Ahmadinejad and the Bonyads, a group of Iranian tax-exempt charities that exert massive control over much of Iran’s economy and have enormous influence over Khamenei and the ruling council of Ayatollahs. Khamenei appears comfortable with showing real flexibility to advance the prospects of striking a deal with Maliki’s government whether U.S. troops stay or go. But Mahmoud Ahmadinejad resists the partnership agreements that could be in the cards regardless of whether the United States withdraws.

According to the predictioneer’s game, Ahmadinejad starts out and ends up advocating much firmer Iranian influence over Iraq than the Iraqis can agree to, and in doing so he is likely to alienate Khamenei.³ Indeed, as we will see, Ahmadinejad doesn’t get his way and this gradually costs him political influence. Meanwhile, the Bonyads—that is, the principal moneyed interests in Iran—remain equally steadfast in their opposition to what could be a very costly Iranian partnership with Iraq. They hold out for about as weak a set of ties as the United States is willing to live with. They advocate a bit more than cordial relations between the two countries, but not much more than that. Who knows, as the Ayatollahs’ influence declines—and as we will see, it is already doing so—the Bonyads may become a vehicle through which the United States can find common ground with important stakeholders in Iran.

On the Iraqi side, Muqtada al-Sadr plays much the same part that Ahmadinejad plays in Iran. Sadr too proves all but immovable. However, even as he and Ahmadinejad try to scuttle an agreement, the game indicates that if the United States withdraws, Maliki and Khamenei will swiftly arrive at an agreement. The deal they are predicted to strike if Obama withdraws all American combat-ready troops is at 60 on the issue scale. This means the two countries will engage in a fair amount of arms transfers. They will capitalize on some coordination between their intelligence services and they probably will sign an alliance (such as a mutual entente) that assures more than nonaggression between them but that does not go so far as to provide guarantees of mutual defense. Such an arrangement probably would be sufficient for Maliki to call on Iran to defend his government against a Sunni uprising if one were to occur, thereby improving the odds of keeping Hashimi at bay.

If, however, the United States keeps fifty thousand troops in Iraq, the picture is entirely different. As can be seen in figure 10.8B, although negotiations can result in Khamenei and Maliki coming to terms, the conditions for a stable outcome are not present. That is undoubtedly because Maliki will face great political pressure at home. That pressure will oppose his signing a partnership agreement with Iran. So, facing such stiff domestic political pressure, Maliki will put any possible deal on hold. Even after simulating more than two years of negotiations, the model does not arrive at an equilibrium outcome: the game goes on. According to the game, the discussions would most probably be broken off well before the two sides could discover a deal the Iraqis could sell politically at home. That is, the American military presence is sufficient to hold Maliki’s feet to the fire, keeping him from making big concessions to Khamenei. There are ways to overcome the problems Maliki will face, but considering that there is a reasonable chance that Iraqi or Iranian diplomats might read this, I leave it to them to work out how to solve their problem. It isn’t likely that they would listen to what I have to say, but why test those waters?

Before closing this opportunity to be embarrassed, let’s take a look at the predicted evolution of political influence in Iran. This reveals some interesting insights that may make us more hopeful for the future, especially if the United States keeps forces in Iraq long enough to buy time for the predicted developments in Iran to take hold.

Figure 10.9 shows the projected changes in political power among four key Iranian interests. Ayatollah Ali Khamenei, the most powerful figure in Iran, is, according to projections from the predictioneer’s game, entering a long period of political decline, probably to culminate in his retirement. This signals a major change in Iranian affairs because he has a veto over virtually all policy decisions. Less well known in the west are Major General Mohammad-Ali Jafari and Ayatollah Ahmad Jannati. Ayatollah Jannati is chairman of the Guardian Council. An antireform cleric, he can veto candidates for parliament, and he has the authority to assess whether parliamentary decisions are consistent with the constitution and with shariah (that is, Islamic) law. As such, he is nearly as powerful a figure as Ayatollah Khamenei. Major General Jafari commands the Islamic Revolutionary Guards Corps, the elite military unit whose support sustains the regime. Each of these individuals is far more powerful than Iran’s president and American nemesis, Mahmoud Ahmadinejad. Figure 10.9 also shows the evolving power of Iran’s Bonyads. The Bonyads were originally created during the era of the Shah and then were completely recast after the Islamic Revolution in 1979. As I have noted, they control vast sums of money, are exempt from taxes, and answer to no one except Iran’s Supreme Leader, Ayatollah Khamenei. They control Iran’s purse strings and, not surprisingly, have a reputation for corruption and mismanagement. But they are also political pragmatists, as we have seen, so they may be people with whom the Obama administration can find a path through to resolve many of the tensions between the United States and Iran.

FIG. 10.9. Evolving Power in Iran: Some Hope for the Future

Figure 10.9, if correct, tells a startling story of emerging change in Iran.⁴ Key religious leaders like Khamenei and Jannati are in political decline. Other clerics (especially the less politically involved Qum clerics, sometimes known as the Quietists) may be picking up some of the lost power, but the lion’s share of shifting political influence falls into the hands of Major General Jafari, as the principal representative of Iran’s elite military units, and the Bonyads, Iran’s money managers. Business interests are also gaining in influence. That is, a more secular and pragmatic, albeit militarized and corruption-laden regime appears to be emerging as Iran’s theocracy goes into political, if not spiritual, decline. While the theocracy is likely to hold on to the symbolic trappings of power, real control is slipping away from them and toward a more conventional strongman, moneyed dictatorship.

The analysis certainly suggests different worlds depending on whether American troops are in Iraq beyond August 2010. If Iran can strike a significant partnership arrangement with Iraq, as is likely if the United States withdraws, Iran will be well on its way to asserting itself as the dominant power in the region and will position Iran to resume its aggressive efforts to export its form of fundamentalist Islam. Such a triumph might even reverse the Ayatollahs’ slide toward lost political control. Fortunately, these developments are unlikely because President Obama is likely to be a man who sticks to his word. Keeping U.S. forces in Iraq appears to be sufficient to deter the strong ties between Iran and Iraq that would provide a basis for Iranian military intervention to defend the Maliki government against a potential Sunni uprising. And it also appears to be sufficient to keep Maliki strong enough that Hashimi is likely to think twice before attempting to push him aside. With a continued U.S. military presence, time can be bought to provide the opportunity for a less anti-U.S. regime to take control in Iran, a trend that emerges in the game under such conditions. Staying creates the chance to deal with a “normal” petty dictatorship and maybe, just maybe, even a nascent more democratic regime. Withdrawal raises the prospects of helping the Ayatollahs stay in power while also jeopardizing the prospects of a pro-U.S. Iraq in the future.

With our analysis in hand, we can cast the debate over whether to leave the troops in place or pull everyone out by August 2010 in a clearer light. Pulling out is tantamount to inviting Iran to step in to fill the void. That would be extremely dangerous from the American perspective. On the flip side, however, we should also ask to what extent a continued U.S. presence is likely to stymie efforts by President Obama and his secretary of state, Hillary Rodham Clinton, to negotiate a resolution of Iran’s growing nuclear threat. The risk, based on other assessments I have done, seems small. What is more, if the Qum Quietist Ayatollahs are on the rise, as seems true from the game, and if the Bonyads and the military are also on the rise, then Iran is soon to enter a more pragmatic era that will help foster resolution of issues, like the nuclear one, that loom so large now. Time will tell. I invite others studying these problems from different perspectives to dare also to be embarrassed and tell us now what they think will happen two years into the future.