Iran, despite having conventions like elections, is not what we would think of as a democracy. A definition for democracy is: "Modern political democracy is a system of governance in which rulers are held accountable for their actions in the public realm by citizens, acting indirectly through competition and cooperation of their elected representatives." (Schmitter and Karl, 1991). Many Iranian politicians have not been held accountable for their actions. One example is when Supreme Leader Ali Khamenei demanded a halt to the Parliaments investigation of former President Mahmoud Ahmadinejad for his role in gutting the economy. Ahmadinejad, an Iranian conservative and, at the time at least, a close ally of Khamenei is one of many leaders whose actions have gone unpunished.
Despite not lining up with Schmitter and Karl's definition of democracy (or any definition in totality), the current regime does allow for more discourse than the regimes discussed in "Life of the Party." Some believe this to be the result of the Islamic faith and the importance of debate, while others believe that if they "were to arrest [everyone] who speaks ill of the government in private, they simply couldn't build cells fast enough to hold their prisoners." (Majd, "The Ayatollah Begs to Differ," 2008). Regardless, Iran typically refrains from the type of large-scale purges Smith describes, something that benefits the regime's legitimacy. For instance, although they regularly refuse to allow more than 95% of presidential candidates to run, they don't murder them, and they rarely trash them or try to tarnish their reputations (besides obviously saying they are unable to run because of their views). These individuals are still allowed to try and run in the next election, and many do. While the Guardian Council's decision is final, rejected candidates are not totally without recourse. Although it is not its stated intention, the process is rather rehabilitative as those who truly want to run will bend the knee to the regime and conform to their ideology. As one might expect, these newly "reformed" Iranian conservatives are still not allowed to run for President. Still, they are given the opportunity to run for city councils and other lesser positions. This is a calculated effort to ensure that, whoever does end up winning the presidency, is someone that is either sure to advance traditional ideas or can be forced into doing so by the might of traditional institutions. With that said, many in Iran recognize this process as undemocratic. To bar an individual from running only serves to weaken the competition, something widely agreed upon to be a critical component in fostering and maintaining democracy.
"To work properly, the ensemble must be institutionalized- that is to say, the various patterns must be habitually known, practiced, and accepted by most, if not all, actors." (Schmitter and Karl, 1991). Schmitter and Karl used this in describing democratic institutions and their functions, but using it in relation to a nondemocratic leader cultivating "democracy" through infrastructural power, coercion, and those very same traditionally democratic institutions that suffer from nondemocratic functions, we can see that these patterns can be used to subvert opposition by providing clear "rules," if you will.
These rules force outsiders to work within institutions and allow us to understand that "when [rulers] need to neutralize threats from larger groups within society and to solicit the cooperation of outsiders, [they] frequently rely on nominally democratic institutions. Specifically, partisan legislatures incorporate potential opposition forces, investing them with a stake in the ruler's survival. By broadening the basis of support for the ruler, these institutions lengthen his tenure." (Gandhi and Przeworski, 2007). That is to say, by relying on these institutions and requiring outsiders (especially political opponents, who are much more likely to support democratic institutions) to do the same, they dramatically shift the balance of power in their favor as they control said partisan legislatures and can use elected officials (like the president) to take the fall of any successes or failures the regime may encounter.