Government of the Islamic Republic of Iran world. The Islamic Republic of Iran created shortly after the Islamic Revolution. The first major demonstrations with the intent to overthrow the Shah Mohammad Reza Pahlavi began in January 1978, with a new, Islam-based, theocratic Constitution being approved in December 1979, ending the monarchy. The Shah fled Iran in January 1979 after large strikes and demonstrations against him and his regime paralyzed the country. Ayatollah Khomeini would return in February of the same year after a long period of exile, greeted in the capital of Tehran by several million Iranians. The final collapse of the Pahlavi dynasty occurred shortly after
Politics of Iran revolutionary leader Ayatollah Khomeini and his supporters in power. Iran's post-revolution challenges have included the imposition of economic sanctions and suspension of diplomatic relations with Iran by the United States because of the hostage crisis, political support to Iraq and other acts of terrorism that the U.S. government and some others have accused Iran of sponsoring. Emigration has lost Iran millions of entrepreneurs, professionals, technicians, and skilled craftspeople and their capital." For this and other reasons Iran's economy has not prospered. Poverty rose in absolute terms by nearly 45% during the first 6 years since Iraqi invasion on Iran started