The rest of the world may be confused, but for Tehran’s business community and cafe-loving urbanites, it’s pretty clear who won Iran’s recent parliamentary election: they did.

And judging by the mood among hard-line legislators in Iran’s parliament, they know they lost. A series of outgoing conservative legislators took the podium to complain, either about the election (one alleged fraud), or President Hassan Rouhani’s economic policies (“Our Islamic Revolution may be damaged,” warned another).

A lot of the confusion in the West stems from trying to tot up whether reformers or conservatives gained more seats — the kind of calculation that would make sense after any election in a typical democracy. But Iran doesn’t have one of those. As Bloomberg View columnist Eli Lake has pointed out, some candidates in the supposedly reformist camp look very conservative.

The root of the confusion comes from using labels that feel familiar to Westerners but don’t really apply to Iran’s partially engineered electoral system, in which participation is heavily censored but the vote itself is real. As the International Crisis Group’s Iran specialist Ali Vaez has argued, Iranian politics doesn’t divide into two neat camps — one reformist and the other conservative — but four messy ones:

Principlists: What Vaez describes as radical theocrats, but in Tehran are called ‘principlists’, include followers of former president Mahmoud Ahmadinejad, who believe the principles of the 1979 revolution must be upheld at any cost.

Unlike most conservatives elsewhere, they support leftist economic policies such as big government, subsidies and high welfare. In Iran’s parliament on Monday, several speakers promoted this ‘resistance’ economy over the government’s proposals.

Pragmatic Principlists: The pragmatic principlists share similarly hard-line views, but favour more free-market economic policies and are willing to bend dogma to strengthen the economy.

Radical Republicans: Vaez calls this group radical republicans, but Iranians I spoke with called reformers. They see the authority of the state arising from elections and popular (rather than divine) will. They favour free markets, liberal social values and cooperation with the West.

Pragmatic Reformers: Pragmatic Reformers advocate a mixed economy and more, if restricted, social freedoms, plus integration into the global economy. This is where Rouhani slots in.

The best way to understand Iran’s recent election is that three of these groups have combined to defeat the fourth: the radical principlists. And that was possible because the brief campaign turned on the nuclear deal, which in turn was seen by Iranians as being all about the economy and the need to end Iran’s international isolation.

To muddy the picture further, radical reformers have been largely wiped off the grid when it comes to political representation. Their main party leaders are under house arrest. Mohammad Khatami, the former reformist president, is an official non-person who can’t be quoted or shown in the media. Most well-known candidates were disqualified before the election. “We don’t really know a lot of the people who ran as reformists,” said Masoud Pezeshkian, a legislator and former health minister under Khatami.

At the same time, though, radical reformists are one of the most powerful voting forces in the country. They arguably swung the election with a social-media campaign that paired a photograph of Khatami’s hands — which, unlike images of his face, aren’t subject to state censorship — with a call to support pro-government candidates.

This mixed bag of politicians who look set to control parliament agree on almost nothing — from human rights to civil liberties to foreign policy. They do, however, agree that restoring the economy is the country’s top priority. And for that, they had to end Iran’s international isolation and accept the nuclear deal.

“The new parliament is a huge win for the business community,” said Cyrus Razzaghi, president of Ara Enterprise, a consultancy that deals with foreign investors. “The plan after the nuclear deal was to apply to join the World Trade Organisation, which will require more transparency, fighting against corruption and creating a better business environment. With this parliament, Rouhani has a good chance of being able to do it.”

This is still a state-driven economy, so who assigns big infrastructure contracts, and whether parliament then blocks or approves them, matters a great deal. Previously, these contracts tended to pump up companies controlled by the Iranian Revolutionary Guard Corps (IRGC) and other businesses friendly to the Ahmadinejad regime. Now Rouhani’s ministers will be assigning them to others.

There’s a deep sense of relief among Tehran’s urban middle class, too. As controlled as Iran’s democracy may be, there was a fierce contest to win the election within the limits that Supreme Leader Ayatollah Ali Khamenei’s regime set. Had it turned out otherwise, the next few years might unfold very differently.

So no, ‘reformers’ didn’t win; there is no coalition in parliament to change Iran’s stifling theocracy — and that won’t change after undecided seats are resolved in a run-off vote in April. Yet there will be fewer radical ‘principlists’ such as Mehrdad Bazrpash in the legislature to block economic liberalisation and grandstand against contamination by the West.

This is likely to be a substantially less obstructive, hard-line parliament than the last. But don’t expect any moves to liberalise on the social front, rein in the IRGC’s activities in places like Syria and Iraq, or suddenly jettison the regime’s deep hostility to the US and Israel. If any of that is to come, it will be much later.

By arrangement with Bloomberg-The Washington Post

Published in Dawn, March 10th, 2016