The toppling of Egypt's modern-day pharaoh through peaceful mass protests, aided by Facebook and Twitter, marks a watershed for Egypt and the entire Arab world. Contrary to widespread anxieties in the U.S. foreign policy establishment, it will also serve the long-term interests of the United States - and Israel.

Many analysts of Egypt have been warning for years that the status quo under Hosni Mubarak was not sustainable. A repressive and deeply corrupt dictatorship was sitting on top of a social volcano - an increasingly young, urbanized, digitally connected population seething over the lack of freedom, dignity and economic opportunity. A quarter of Egypt's working-age youth are unemployed and many more under-employed. Over the past two decades, average incomes in Egypt stagnated while they doubled or tripled elsewhere in the region.

Think of what could have happened. Many observers (including myself) worried that the growing alienation of young Egyptians might flow in anti-American, anti-Israeli and radical Islamist directions. The inevitable eruption could have turned violent, resulting in the kind of bloody suppression that gripped Algeria in the early 1990s, when 200,000 died. Or it might have been hijacked by radical Islamists who would ride the popular revolution to power, as in Iran in 1979.

So far, none of these have happened. The millions of Egyptians who have poured into the streets of Cairo and other cities have not been chanting "down with America," nor have their protests been about Israel (or the Palestinians). Rather, they want freedom, justice and accountability in Egypt. They have mobilized for democratic change with extraordinary discipline, imagination and moderation. In the face of killings, provocations, arrests and torture, they have adhered to nonviolence as a sacred principle.

In achieving the first condition for Egypt's liberation, the departure of the pharaoh, through peaceful grassroots mobilization, a huge chip has been lifted from their shoulders. Now Egyptians feel a new sense of pride, confidence and empowerment. And they are beginning to view the United States in a fresh and more hopeful light, not because of President Obama's Cairo Speech in 2009 but because of what he said and subtly did in the last two weeks (after several rhetorical blunders by some in his administration). As the mass protests grew, Obama aligned the United States more explicitly behind the goal of peaceful democratic change, warned the regime against the use of force, and urged Mubarak to step aside. The experience could mark a turning point not just for Egypt but for Barack Obama personally. He now has the chance to nurture democratic change in the Arab world through artful diplomacy and timely assistance, where George W. Bush failed with blunter rhetoric and means.

Israel as well should be reassured by developments so far. Egypt's new (and hopefully temporary) military junta has quickly reaffirmed the country's treaty obligations. Few protesters are calling for abrogation of Egypt's peace with Israel. Most protesters resent Israel's treatment of the Palestinians and want an independent Palestinian state, but mainly they want to transform their own country politically and economically. They know their aspirations for human dignity and economic opportunity can only be met with far-reaching internal reforms, and that the worn-out theme of anti-Zionism is a divergence from that. Israel and its friends should thus welcome democratic change in Egypt. The only way to guarantee a lasting Middle East peace is to root negotiated agreements in the same democratic legitimacy that undergirds the stability and resilience of Israel's political system. As Thomas Friedman recently observed, it is a better bet to make peace with 82 million people than with one man.

The challenge now is to ensure that Egypt's revolution produces a genuine pluralist democracy. This is far from assured.

Egypt's military rulers may well seek to sabotage the transition and restore the old order with a slightly more democratic façade. Or the Muslim Brotherhood (which rejects violent means but clings to Islamist political ends) could gain the upper hand in popular mobilization or elections. But the second scenario will be much more likely to follow, rather than prompt, the first. If a democratic transition unfolds seriously and peacefully through negotiations and reform, and if democratic institutions are well designed, the Muslim Brotherhood will be a significant but minority player.

For Egypt, Mubarak's fall is only the first step along a tortuous path. If its transition leads to democracy, it will produce a much more reliable partner for peace and progress in the Middle East. That is why other democracies in the world should support it in every way possible.

Stanford University’s Center on Democracy, Development, and the Rule of Law in partnership with the Canadian Foreign Affairs and International Trade department are hosting a symposium, Addressing the Accountability Gap in Statebuilding: The Case of Afghanistan, on February 25, 2011. The distinguished Ashraf Ghani, former Afghan Minister of Finance and 2009 Presidential Candidate, will be delivering the keynote address. This event will bring together practitioners, experts, and diplomats from Afghanistan and beyond, to share experiences and explore options to improve the contemporary practice of state-building. This conference and keynote address is open to the public.

The first decade of the 21st century has seen a dramatic reversal of fortune in the relative prestige of different political and economic models. Ten years ago, on the eve of the puncturing of the dotcom bubble, the US held the high ground. Its democracy was widely emulated, if not always loved; its technology was sweeping the world; and lightly regulated "Anglo-Saxon" capitalism was seen as the wave of the future. The United States managed to fritter away that moral capital in remarkably short order: the Iraq war and the close association it created between military invasion and democracy promotion tarnished the latter, while the Wall Street financial crisis laid waste to the idea that markets could be trusted to regulate themselves.

China, by contrast, is on a roll. President Hu Jintao's rare state visit to Washington this week comes at a time when many Chinese see their weathering of the financial crisis as a vindication of their own system, and the beginning of an era in which US-style liberal ideas will no longer be dominant. State-owned enterprises are back in vogue, and were the chosen mechanism through which Beijing administered its massive stimulus. The automatic admiration for all things American that many Chinese once felt has given way to a much more nuanced and critical view of US weaknesses - verging, for some, on contempt. It is thus not surprising that polls suggest far more Chinese think their country is going in the right direction than their American counterparts.

But what is the Chinese model? Many observers casually put it in an "authoritarian capitalist" box, along with Russia, Iran and Singapore. But China's model is sui generis; its ­specific mode of governance is difficult to describe, much less emulate, which is why it is not up for export.

The most important strength of the Chinese political system is its ability to make large, complex decisions quickly, and to make them relatively well, at least in economic policy. This is most evident in the area of infrastructure, where China has put into place airports, dams, high-speed rail, water and electricity systems to feed its growing industrial base. Contrast this with India, where every new investment is subject to blockage by trade unions, lobby groups, peasant associations and courts. India is a law-governed democracy, in which ordinary people can object to government plans; China's rulers can move more than a million people out of the Three Gorges Dam flood plain with little recourse on their part.

Nonetheless, the quality of Chinese government is higher than in Russia, Iran, or the other authoritarian regimes with which it is often lumped - precisely because Chinese rulers feel some degree of accountability towards their population. That accountability is not, of course, procedural; the authority of the Chinese Communist party is limited neither by a rule of law nor by democratic elections. But while its leaders limit public criticism, they do try to stay on top of popular discontents, and shift policy in response. They are most attentive to the urban middle class and powerful business interests that generate employment, but they respond to outrage over egregious cases of corruption or incompetence among lower-level party cadres too.

Indeed, the Chinese government often overreacts to what it believes to be public opinion precisely because, as one diplomat resident in Beijing remarked, there are no institutionalised ways of gauging it, such as elections or free media. Instead of calibrating a sensible working relationship with Japan, for example, China escalated a conflict over the detention of a fishing boat captain last year - seemingly in anticipation of popular anti-Japanese sentiment.

Americans have long hoped China might undergo a democratic transition as it got wealthier, and before it became powerful enough to become a strategic and political threat. This seems unlikely, however. The government knows how to cater to the interests of Chinese elites and the emerging middle classes, and builds on their fear of populism. This is why there is little support for genuine multi-party democracy. The elites worry about the example of democracy in Thailand - where the election of a populist premier led to violent conflict between his supporters and the establishment - as a warning of what could happen to them.

Ironically for a country that still claims to be communist, China has grown far more unequal of late. Many peasants and workers share little in the country's growth, while others are ruthlessly exploited. Corruption is pervasive, which exacerbates existing inequalities. At a local level there are countless instances in which government colludes with developers to take land away from hapless peasants. This has contributed to a pent-up anger that explodes in many thousands of acts of social protest, often violent, each year.

The Communist party seems to think it can deal with the problem of inequality through improved responsiveness on the part of its own hier­archy to popular pressures. China's great historical achievement during the past two millennia has been to create high-quality centralised government, which it does much better than most of its authoritarian peers. Today, it is shifting social spending to the neglected interior, to boost consumption and to stave off a social explosion. I doubt whether its approach will work: any top-down system of accountability faces unsolvable problems of monitoring and responding to what is happening on the ground. Effective accountability can only come about through a bottom-up process, or what we know as democracy. This is not, in my view, likely to emerge soon. However, down the road, in the face of a major economic downturn, or leaders who are less competent or more corrupt, the system's fragile legitimacy could be openly challenged. Democracy's strengths are often most evident in times of adversity.

However, if the democratic, market-oriented model is to prevail, Americans need to own up to their own mistakes and misconceptions. Washington's foreign policy during the past decade was too militarised and unilateral, succeeding only in generating a self-defeating anti-Americanism. In economic policy, Reaganism long outlived its initial successes, producing only budget deficits, thoughtless tax-cutting and inadequate financial regulation.

These problems are to some extent being acknowledged and addressed. But there is a deeper problem with the American model that is nowhere close to being solved. China adapts quickly, making difficult decisions and implementing them effectively. Americans pride themselves on constitutional checks and balances, based on a political culture that distrusts centralised government. This system has ensured individual liberty and a vibrant private sector, but it has now become polarised and ideologically rigid. At present it shows little appetite for dealing with the long-term fiscal challenges the US faces. Democracy in America may have an inherent legitimacy that the Chinese system lacks, but it will not be much of a model to anyone if the government is divided against itself and cannot govern. During the 1989 Tiananmen protests, student demonstrators erected a model of the Statue of Liberty to symbolise their aspirations. Whether anyone in China would do the same at some future date will depend on how Americans address their problems in the present.

The writer is a fellow at the Freeman Spogli Institute for International Studies at Stanford University. His latest book, The Origins of Political Order, will be published in the spring.

On January 18, the Honorable Bob Rae, Liberal Member of Parliament for Toronto Centre and the foreign affairs critic for the Liberal Party of Canada was the featured speaker at a special CDDRL seminar. Rae addressed the Stanford community on the topic of his latest book Exporting Democracy, published in November 2010 by McClelland & Stewart. CDDRL Deputy Director, Kathryn Stoner, welcomed Rae to Stanford and Ben Rowswell, Visiting Scholar and Canadian "diplomat in residence," introduced the distinguished Rae stressing the timeliness of this topic.

This occasion marked the debut of Rae's book to a US audience and drew a sizable crowd interested in learning more about the MP's views on the role of Western powers in statebuilding and democracy promotion efforts abroad. Based on his personal experience engaging in diplomatic missions in Iraq, Afghanistan, Sri Lanka, and across the Middle East, Rae was confronted with the limits of power and democratic ideals in foreign lands.

 His discussion focused on the theoretical and practical analysis of the role of democracy in statebuilding that is the foundation of his argument in Exporting Democracy. Drawing  on the writing of 18th century philosophers, Thomas Paine and Edmund Burke, Rae examined the tensions between natural law and justice versus customs and tradition that continue to dominate the debate in modern day statecraft.

 Rae's experience observing democracy promotion abroad allowed him to recognize the importance of upholding democratic values, while also respecting the idea that democracy cannot be viewed as the "gold standard" for all. "From a Western perspective the debate suffers from the notion that the idea of democracy has emerged as perfectly natural and an automatic assumption of our daily lives. In reality it has generally been accompanied by periods of great conflict and can take hundreds of years to bear fruit as evidenced by the American and Canadian experience."

Rae emphasized that the best way Western countries can promote democracy is by helping other countries develop their own solutions to their own problems. 

Rae's sensitivity to the consequences of Western interventions, his belief in the principles of human rights, and his testimony to the importance of humility and pragmatism in our efforts of statebuilding abroad, offered the Stanford community a new perspective on the effectiveness of the global democracy movement.