Executive summary

Iran is experiencing a compounding legitimacy failure driven by (1) acute economic deterioration (currency collapse, high inflation, shortages), (2) long-running procedural legitimacy erosion (perceptions of exclusionary elections and narrowing political choice), (3) security-first governance that treats dissent as hostile infiltration, and (4) a looming succession horizon that raises elite risk-aversion and intensifies repression/coordination problems. Recent protests—reportedly involving bazaar networks and spreading across multiple provinces—are a key indicator because they implicate constituencies historically important to regime stability, not only youth or peripheral groups. 

Prognosis: Absent rapid economic stabilization and credible political/administrative concessions, Iran’s legitimacy deficit is likely to deepen over the next 6–18 months, producing more frequent protest waves, episodic strikes, higher intra-elite friction, and growing reliance on coercion. The most probable outcome is not immediate collapse but “brittle resilience”: the state can suppress mobilization, yet each suppression further depletes trust, compliance, and investable confidence—raising the long-run probability of a discontinuity (succession shock, fiscal shock, or security-force fracture). 

1) Analytical frame: what “legitimacy failure” means in practice

Legitimacy is the belief that rule is rightful, which enables:

Voluntary compliance (taxes, rules, conscription, policing cooperation) Lower enforcement costs (less coercion needed) Credible policy (people and markets believe announced reforms) Elite coordination (factions accept arbitration rather than defections)

A legitimacy failure is rarely one thing. It usually becomes a stacked failure across four pillars:

Performance legitimacy (living standards, basic services, macro stability) Procedural legitimacy (elections, accountability, fairness, anti-corruption credibility) Identity/ideological legitimacy (narratives that bind the coalition and justify sacrifices) International legitimacy (sanctions pressure, diplomatic isolation, war/near-war dynamics)

Iran’s current episode reflects stress across all four—which is why it is more dangerous than a single-issue grievance cycle. 

2) Diagnosis: how legitimacy is failing in Iran right now

A. Performance legitimacy is cracking under macro and infrastructure stress

Recent reporting describes protests tied to soaring inflation, a weakening currency, and worsening economic conditions, with additional public frustration over water and electricity shortages. 

When households and merchants cannot plan—prices jump, currency slides, supply becomes erratic—legitimacy degrades through a simple mechanism:

Predictability collapses → planning becomes impossible → citizens infer misrule or capture → compliance declines

Bazaar-linked protest dynamics matter here: when commercial networks (not just marginalized groups) mobilize, it signals that economic grievances have crossed into coalition-threatening territory. 

B. Procedural legitimacy has been eroding via perceived narrowing of political choice

Analyses of Iran’s recent electoral landscape highlight exclusionary dynamics and the regime’s dilemma: lower turnout may secure control but can further undermine perceived legitimacy. 

This produces a structural pattern:

Selection narrows → winners lack broad mandate → policy bandwidth shrinks → crisis management depends more on force than consent

C. Coercive governance is substituting for consent—raising the long-term “legitimacy cost”

Recent protest coverage indicates fatalities, arrests, and a heavy security response, alongside official rhetoric distinguishing “legitimate demands” from “rioters.” 

In legitimacy terms, repeated crackdowns can “work” tactically while failing strategically:

Short-run order is achieved But future compliance becomes more expensive People shift from “complaint within the system” to “exit/defection/sabotage/underground organizing”

D. The succession horizon amplifies brittleness and elite coordination problems

Multiple Iran-focused analyses emphasize that leadership transition dynamics (and the institutions/factions positioned around them) are central to regime stability risks. 

Succession uncertainty tends to generate:

Risk aversion (fewer reforms, more “security default”) Factional hedging (economic networks hoard resources; insiders diversify loyalties) Hardening of veto players (greater difficulty making credible concessions)

E. Information warfare and external signaling can worsen internal legitimacy dynamics

Recent reporting notes international commentary and threats around Iran’s protest response. Regardless of intent, external rhetorical intervention often helps regimes reframe domestic dissent as foreign-instigated—sometimes strengthening the security coalition even as it inflames the street. 

3) Key indicators: how to tell whether legitimacy failure is stabilizing or accelerating

A practical “dashboard” (track weekly):

Mass behavior

Geographic spread and persistence of protests (days/week; provinces involved)  Shift from demonstrations to strikes (especially bazaar, transport, energy, education) Evidence of cross-class participation (middle class/shopkeepers joining) 

State behavior

Pattern of security response (targeted arrests vs broad lethal force)  Messaging split: “dialogue” vs “punish rioters” divergence in elite rhetoric 

Economic/administrative

Currency stability and inflation trajectory (confidence proxy)  Energy/water service disruptions and rationing signals  Visible anti-corruption actions that affect insiders (rare but high-signal)

Elite cohesion

Public signs of elite disagreement (resignations, scapegoating central bank, unusual clerical dissent) IRGC-economic interests under strain or repositioning (privatizations, seizures, patronage reallocations) 

4) Prognosis: plausible pathways over the next 6–18 months

Scenario 1 (Most likely): Brittle resilience and recurrent unrest

Description: The state contains protests via arrests, intimidation, and selective concessions; macro conditions remain harsh; protests recur in waves.

Why likely: The security apparatus is strong, but economic stabilization is hard under sanctions and structural constraints, and political concessions are costly under succession uncertainty. 

Consequences: higher enforcement costs, capital flight, brain drain acceleration, wider informal economy, episodic violence.

Scenario 2: Managed de-escalation through partial economic stabilization + limited reforms

Description: Some combination of technocratic steps (exchange-rate management, subsidies, targeted relief) and controlled political opening reduces intensity.

Constraints: Requires credible implementation and elite consensus; otherwise it’s perceived as temporary or manipulative. Recent calls for dialogue suggest some interest, but credibility is the binding constraint. 

Consequences: reduced near-term unrest; legitimacy still fragile; “breathing space” not resolution.

Scenario 3: Discontinuity triggered by succession shock or security-force fracture

Description: A sudden leadership/transition event, coupled with street mobilization and elite splits, produces a non-linear political rupture.

Why possible: succession dynamics are repeatedly flagged as a central uncertainty; legitimacy is already strained; coercion-heavy approaches can backfire if cohesion slips. 

Consequences: high volatility; possible emergency rule; unpredictable regional spillovers.

5) Second-order consequences of legitimacy failure

Internal governance and economy

Tax morale and compliance decline → fiscal stress Investment paralysis → worsening unemployment and inflation feedback loops Service delivery collapse (power/water disruptions become political accelerants)  Rise of parallel governance: informal markets, patronage distribution, securitized “problem-solving”

Social fabric

Polarization and atomization: distrust of institutions expands into distrust among social groups Exit behaviors: emigration, internal disengagement, refusal to participate in public life

Regional and international

Higher risk tolerance abroad (diversionary incentives) or, conversely, retrenchment if internal control consumes bandwidth Sanctions and counter-sanctions cycles intensify economic pain, further degrading performance legitimacy 

Information environment

Increased censorship and communications disruption (to limit coordination) “Narrative hardening”: external threats become central justification for internal control 

6) Implications for external stakeholders and policy planners

This section is descriptive (not advocacy). Planners typically face a tradeoff: pressure that signals support for human rights can also strengthen regime narratives of foreign orchestration.

Common planning priorities:

Humanitarian risk mapping (medical access, sanctions carve-outs, refugee contingencies) De-escalation channels to reduce lethal protest-response spirals Financial compliance clarity (to prevent over-compliance that worsens civilian harm) Monitoring for escalation triggers (lethal-force spikes, strikes in critical sectors, elite fractures) 

7) Bottom line

Iran’s legitimacy failure in January 2026 is best understood as a system-level stress event: economic deterioration collides with procedural exclusion, coercive substitution for consent, and succession-driven elite rigidity. The near-term trajectory is likely recurrent unrest with intermittent repression, unless credible stabilization measures materially improve everyday predictability and the state finds a way to reduce the perceived gap between “ruled” and “rulers.”