This thesis examines how the monarchial regime of the al-Khalifa dynasty of Bahrain has skillfully tailored the tools of statecraft, both in international diplomacy and domestic policy, for one primary objective: to restrain attempts for democratic reform in order to sustain the regime's wealth and power. The al-Khalifa regime has shaped statecraft policies into a unique set in order to limit democratic initiatives. The monarchy blurs the lines between at democratization as contrasted with taking a few steps toward liberalization in order to address the nation's continuing unrest. The regime exacerbates the Sunni-Shi`a divide by hiring Sunni foreigners to serve in the security forces and deliberately stokes sectarian conflict by blaming Iran for inciting the Shi`i population. The regime encourages the hiring of migrant workers, which benefits the monarchy's wealth and fosters competition for jobs between groups of workers; at the same time, the regime denies migrants steps toward citizenship. Through its foreign relations polices, the monarchy prudently balances its relationships with the United States and Saudi Arabia for the primary purpose of maintaining power. Unique circumstances, as revealed by Bahrain's history, have influenced the al-Khalifa's governance of the nation. These factors include: US military base on Bahrain's land, a Sunni minority ruling a Shi`i majority, a well-educated citizenry willing to protest for democratization and labor rights, dwindling oil resources, and a geopolitical position between two rival regional powers, Saudi Arabia and Iran. / History