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A year after Barack Obama relaunched America's relations with the world's rogue states, the verdict is in: from Burma to North Korea, Venezuela to Iran, the outstretched hand has been met with the clenched fist. Aung San Suu Kyi remains under house arrest in Rangoon, Pyongyang is testing missiles, Caracas rails against gringo imperialism, and Tehran has dismissed a year-end deadline to do a deal on its nuclear program. Engagement has failed and Obama is now poised to deliver on threats of tougher sanctions, as surely he must. Right? Well, not necessarily.

What Washington has failed to fully recognize is that the world that created "rogue states" is gone. The term became popular in the 1980s, mainly in the United States, to describe minor dictatorships threatening to the Cold War...