From a humanitarian perspective, few international policy proposals appear more compelling than debt relief for the world's poor. The poorest countries have seen their external debts spiral to the point where interest payments are crowding out desperately needed investments in roads, schools, sanitation, health care, and other social services. The majority of their people live below the poverty line, struggling to survive on a dollar or two a day. Average life expectancy is well below 60 years and declining in many countries because of AIDS. Lacking access to safe drinking water, preventive medicine, and basic education, as well as to markets, credit, and justice, people live needlessly short and degrading lives.

Since Saddam Hussein's fall from power last April, the world has learned a great deal about the consequences of his abhorrent rule: mass killings, a brutalized population, staggering corruption, an impoverished population, a devastated environment, neglected educational institutions, a miscarried justice system, and other failing governmental functions. This legacy of Saddam's horrific misrule is the most dramatic demonstration of the vital connection between the vibrancy and economic development of a people and the nature of their governing institutions. The mounting evidence of this linkage around the world must drive a revolution in the way that we administer foreign assistance.

While I was there, the CPA repeatedly misjudged and underestimated the most important Shiite leader, Grand Ayatollah Ali Sistani, and finalized in early March an interim constitution that most Iraqis (including Sistani) felt gave too sweeping a veto to minorities and too little participation to the people. When I traveled the country speaking about this new document, I was stunned by the anger and frustration of Iraqis who felt excluded from the process. But by then, the CPA was interested only in "selling" the document (for which we hired an expensive advertising agency). Too often, our engagement with ordinary Iraqis was a one-way conversation from above.

Today, as the U.S. continues to battle the radical Shiite insurgency led by cleric Muqtada Sadr while trying to sell Iraqis on its post-occupation plans, the challenges are as tough as ever. The new interim government includes a number of politically shrewd Iraqis, some with roots in Iraq's crucially important tribes, who may yet prove capable of mobilizing support for the political transition. But the new government will not be viable and the elections for a transitional parliament will drown in bloodshed and fraud unless the new Iraqi state can defeat the former regime loyalists, the terrorists, the organized criminals and the militias. To do that, a recommitment from the United States -- and a smarter American strategy -- will be needed.

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HILLA, IRAQ - On a rough, woven mat, under a huge tented mudheef (a traditional reed-frame guesthouse), atop the roof of one of Iraq's most beautiful mosques, a giant bear of a man implores his American visitors to act against the religious fanatics who have vowed to kill him and destroy his movement for democracy. The black-turbaned man with outsized feet, hands, girth, and ambition is a Sayyid, a direct descendant of the Prophet Mohammed. With his unruly black beard, flowing clerical garb, and retinue of religious followers, he could easily be mistaken for just another radical Shiite mullah.

With the transfer of power to a new interim Iraqi government on June 28, the political phase of the U.S. occupation came to an abrupt end. The transfer marked an urgently needed, and in some ways hopeful, new departure for Iraq. But it did not erase, or even much ease at first, the most pressing problems confronting that beleaguered country: endemic violence, a shattered state, a nonfunctioning economy, and a decimated society. Some of these problems may have been inevitable consequences of the war to topple Saddam Hussein. But Iraq today falls far short of what the Bush administration promised. As a result of a long chain of U.S. miscalculations, the coalition occupation has left Iraq in far worse shape than it need have and has diminished the long-term prospects of democracy there. Iraqis, Americans, and other foreigners continue to be killed. What went wrong?

How do we balance two conflicting imperatives for U.S. foreign policy: preserving the short-term stability of Arab regimes that have been friendly-or at least not explicitly and intractably hostile-to the United States and promoting a deeper, more organic stability in the region through democratic reform?

Iraqi's failure to complete a constitution by August 15 is a blow to the country's prospects for political stability and democracy--and to the credibility of the Bush administration, which staked so much on this deadline. But there could have been a worse development: a bad constitution--unworkable, illiberal, or unacceptable to a section of the country. At least that disaster has been averted for now....

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