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Hi-
This is a question of standard expression not x but y which equals parallel entities. In order for the two entities to be parallel they must have the same part of speech.
to participate=infinitive/ noun
it affirms= verb
So are they parallel? No they are not
So we need to find the answer that follows the parallel structure and provides a noun.

It could be argued that the most significant virtue of a popular democracy is not the right to participate in the selection of leaders, but rather that it affirms our importance in the scheme of things.

(A) but rather that it affirms- incorrect as stated above
(B) but rather its affirmation of-parallel as affirmation is a noun
(C) but rather it’s affirmation in terms of- overly wordy-"in terms" is not needed to complete the meaning
(D) but instead of that, its affirming that- overly wordy- the use of that is redundant and not needed
(E) affirming rather-does not provide but which is needed with not

so B is the best and correct answer!

Hope this helps :)
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Looking out for the structural parallelism that is required with the use of not X … but rather Y clues you right to the answer here.
The underlined portion of the sentence says ‘not the right’ – now here the right is in its noun form and therefore the structural requirement after but is another noun – which is satisfied by Option B with affirmation.

You can go ahead and eliminate Options A, C, D, and E.
Option B is the best choice.

Hope this helps!
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