Multi-layered Principal-Agent Relationships: The Case of Hizballah and the Badr Organization Using Iranian Sponsorship to Extend Their Power and Influence

Abstract

Iran has been using militant proxy partners to advance its strategic foreign policy objectives in the Middle East for over five decades. Yet not all of Iran’s proxies are equal. Some remain fully dependent upon Iran, while others have become fully independent, exhibiting agency, choice, and differing interests from Iran. Why do some Iranian proxies develop into independent geopolitical actors with high levels of agency and autonomous interests? This manuscript explores this question by examining the cases of the Lebanese Hizballah and the Iraqi Badr Organization using a principal-agent approach. It studies the complicated trade-offs that these militant proxy partners have negotiated with Iran in exchange for ongoing sponsorship, focusing on the varying effects Iran’s patronage has had on these agents. It argues that exogenous variables including the level of state fragmentation, the degree of active conflict in the host state, the level of Shi’a ideological identity, the balance of threat amongst ethno-sectarian groups, and the strength of leadership and level of organization and structure of the proxy group drives the differentials in power, objectives, and interests between sponsor and proxy. By comparing the effects of Iranian sponsorship on Hizballah and the Badr Organization, I demonstrate that both militant proxy partners have distinct characteristics that influenced the level of control that Iran has been able to exert over them, and, more importantly, that has allowed them to leverage Iranian sponsorship to extend their power, influence, and regional reputation.