In recent years, the IRI has managed to increase its influence in the Middle East. The strategic use of proxy warfare has played a central role as surrounding countries have become destabilised. However, following the positivist logic of structural IR theories, the materially inferior IRI should not be a stronger player in the region’s conflicts than the US and its Arab allies. The Iranian success in proxy warfare, therefore, provides a paradox for the explanatory framework of reductionist IR theories which rely on rational and positivist epistemologies. I argue that this is because these perspectives do not endorse an adequate comprehension of the mutual embedded relations which have served the IRI a strategic advantage in proxy warfare. In a challenge to the parsimonious reductionism of structural IR and security studies, I adopt Feklyunina’s constructivist framework for analysing soft power as a relational identity. Thereby, I switch the focus from a top-down analysis of the IRI to a focus including Iraqi insurgencies’ acceptance or rejection of the IRI’s national identity and foreign policy goals. I argue that identity matter in proxy relations. Hence, I estimate the IRI’s strength in proxy warfare based on potential Iraqi insurgencies’ compatible identities. I employ a longitudinal historical research design tracing the development of collective identities within Iraq. The study finds that the Iraqi Shi’ites share important common facets of their identity with the IRI and have subsequently been willing to fight as proxies against American and Sunni forces in Iraq. However, identity and legitimacy structures in the Middle East are complex, multifaceted, constantly changing, and dependent on context. Iraqi Shi’ites still preserve some reservations and antipathy towards the Iranian regime due to a nationalist sense of community.

This thesis examines and evaluates the questions involved in American arms sales to Iran and Egypt. The first two chapters outline the historical background and present detailed analyses of Iran's political situations prior to 1968 and United States policy toward it in that period of time. Chapter Three considers the American policies towards Egypt and the United States arms sales to that country. The main argument of the thesis appears in chapter Four which explains the objectives of Iran's government in buying American arms and the United States government's objectives in selling arms to Iran. Conclusions on the study comprise the fifth chapter.