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Tentative moves to increase government spending on health, social security and pensions, alongside liberalising laws designed to allow more private-sector involvement in areas previously dominated by the state, helped the economy move forward.
During his two terms in office, the outgoing, moderately reformist president, Muhammad Khatami, has repeatedly had his liberalising laws approved by Iran's elected parliament only to see them overruled by the country's other, more powerful parallel government, an unelected theocracy topped by the Supreme Leader, Ayatollah Ali Khamenei.
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He also promised to relax the media laws and liberalise laws on freedom of assembly.
He wants to end the Catholic church's privileged status in schools and to liberalise laws on gay marriage and abortion.
Tolerance of homosexuality, for example, is patchy, but has improved since 1977, when the Rev Ian Paisley, founder of the DUP, launched "Save Ulster from Sodomy", a campaign to prevent Britain from applying its recently liberalised laws to Northern Ireland (four years later the European Court of Human Rights forced it to).
"We have tended to be ahead of the rest of the world in terms of liberalising our laws so I don't really believe that the European jurisdiction of Luxembourg [which enforces EU law] or Strasbourg [which governs human rights law] makes this country a better place than it would be otherwise".
This has led to talk of liberalising immigration laws.
The Liberal Democrats have historically been supportive of liberalising drug laws.
The party may now lack the courage to move quickly on economic reform, which requires controversial measures, such as liberalising labour laws.
Liberalising the laws on dual citizenship and gay marriage would be real progress (alas, this is where Mrs Merkel seems to be resisting most).
Problems with the housing market will be solved by liberalising planning laws and encouraging house-building, not by reaching back for old statist solutions.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com