One of the best contemporary analysts on Iran contrasts two paths for modernization:
For now the Islamic Republic endures like other autocracies in the Middle East. But the alienation of the population and the fragmentation of the elite will mean an uneasy future. With its politics so polarized, Iran cannot sustain its legitimacy on the basis of economic performance, backed by oil. The violence of 2009 severed an essential bond between the state and society.
The Islamic Republic will either hang on as an autocratic theocracy or be transformed into a populist democracy. The irony is that Ayatollah Khamenei, by ruthlessly consolidating his power, might have ensured that the system he created will not easily endure without his steady hand.