This paper examines US policy towards the South Caucasus as a case of structural and institutional limits on the effectiveness of foreign policymaking in democratic states. Specifically, the constitutional separation of powers, the influence of domestic interest groups, and growing multipolarity at the global and regional levels have operated together to limit Washington’s policy options and precluded a leading role for the US in effectively shaping outcomes within the region. The second section of the paper assesses how these factors impacted US policy over the three decades following the end of the Cold War. The final section argues that the gradual marginalization of the United States and engagement of other regional powers has created conditions under which a modest but balanced approach rooted in economic outreach offers greater chance of tangible results than the rhetorically ambitious but practically constrained approach of the past several decades.