The dramatic events currently unfolding in Caracas, where US elite forces have captured Nicolás Maduro & his wife following military strikes, are being hailed by some as a "liberation." The American administration parading the former South American strongman in handcuffs on television has sent reverberations across the globe, including his former allies in Tehran. 

For Iranians currently witnessing the record-breaking collapse of the rial, trading at around IRR1.36mn to the US dollar on the open market, this "Noriega moment" offers a seductive but dangerous narrative: the idea that a regime can be decapitated from the outside to make way for a new beginning.

However, as a scholar who has tracked the structural developments in the Iranian economy for decades, I find the lessons from Venezuela much darker. My research suggests that the "Venezuela path" is defined by a specific, lethal intersection: a permanent state of siege from the outside and a deep institutional rot of corruption from the inside.

Western policymakers often treat sanctions as a "one-size-fits-all" tool, assuming that enough pressure will naturally lead to democratic change. But my recent co-authored study (Farzanegan & Albarawi, 2025) challenges this assumption. By analysing data from over 120 countries, we found that economic sanctions increase the risk of internal conflict and instability only in countries with high levels of public corruption.

In countries with lower levels of administrative corruption, societies often experience a "rally-around-the-flag" effect that fosters national solidarity. However, in highly corrupt states like Iran and Venezuela, sanctions act as a multiplier for instability. When a state is perceived as corrupt, the population no longer sees sanctions as an attack on national sovereignty but as a form of support for their struggle against a predatory elite. In this environment, every dollar lost to sanctions is one less dollar for a nurse or teacher, while the "sanction-busting" shadow elite remains untouched.

This brings us to the core institutional failure within the Islamic Republic of Iran. While our other study highlighted the staggering hollowing out of the Iranian middle class over the past two decades, we must acknowledge that this is not solely an external phenomenon.

The tragedy is that a state under a permanent siege provides a convenient cover for systemic corruption. In resource-rich autocracies, external pressure fuels a culture of clientelism. As the formal economy is strangled, the state creates opaque networks to bypass restrictions. These networks are dominated by a shadow elite, often connected to the military apparatus, who profit from the very currency volatility and scarcity that are starving the public.

When a citizen lacks essential medicines while news of billion-dollar embezzlements breaks, the "opportunity cost" of rebellion drops to near zero. The current protests in Iran are a reaction to the perception that a pincer movement of external siege and internal theft has incinerated the social contract.

Adding to this internal decay is the rise of what I call the "Digital Rentier State." As traditional oil rents have dwindled, the state has sought new ways to extract wealth from its citizens. By implementing extensive internet filtering and then profiting from the sale of state-linked VPNs, the government has turned digital access into a new form of rent.

This domestic predatory behaviour adds a layer of internal siege to the external one. It creates a new "filtering tax" for the newly poor, further alienating the connected youth who are the primary drivers of modern protests. The visibility of this inequality, amplified by high internet penetration, makes grievances impossible to hide.

The events in Caracas prove that "Maximum Pressure" is a strategy of diminishing returns. My joint research on the sanctions and conflict suggests that while high-intensity pressure triggers civil disorder, it simultaneously makes organised, stable regime change less likely by providing the state with a "security-first" excuse to consolidate and repress.

The use of military force to remove Maduro is a silent admission that economic warfare failed to produce a stable domestic alternative. For the Islamic Republic, the warning is clear: until the policy of collective punishment is replaced by genuine diplomacy, and until the Iranian state addresses its internal rot, the country will remain trapped in a cycle of instability of protests, crackdowns and consolidation of the state by groups within the wider apparatus.

The majority of Iranian people are not asking for a foreign-led decapitation of their state; they are asking for accountability. A political system that responds to cries for relief with a proposal to increase the taxes in the government budget by more than 60% (as planned for 2026), while failing to address the deep-seated corruption that undermines institutional resilience, is adding fuel to a fire already stoked from the outside.

Without a restoration of the middle class and a commitment to institutional reform, Iran is not witnessing a "new beginning"; it is witnessing a slow descent into a permanent, Venezuelan-style crisis.

Author Bio:
Mohammad Reza Farzanegan is Professor of Economics of the Middle East at the Centre for Near and Middle Eastern Studies (CNMS), Philipps-Universität Marburg, Germany.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of bne IntelliNews. This op-ed represents the author's independent analysis and commentary.