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governance. The Iraqi government is not effectively providing
its people with basic services: electricity, drinking water,
sewage, health care, and education. In many sectors, production
is below or hovers around prewar levels. In Baghdad and
other unstable areas, the situation is much worse. There are
five major reasons for this problem.

First, the government sometimes provides services on a
sectarian basis. For example, in one Sunni neighborhood of
Shia-governed Baghdad, there is less than two hours of electricity
each day and trash piles are waist-high. One American
official told us that Baghdad is run like a “Shia dictatorship” because
Sunnis boycotted provincial elections in 2005, and therefore
are not represented in local government.
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Second, security is lacking. Insurgents target key infrastructure.
For instance, electricity transmission towers are
downed by explosives, and then sniper attacks prevent repairs
from being made.

Third, corruption is rampant. One senior Iraqi official estimated
that official corruption costs Iraq $5–7 billion per year.
Notable steps have been taken: Iraq has a functioning audit
board and inspectors general in the ministries, and senior leaders
including the Prime Minister have identified rooting out
corruption as a national priority. But too many political leaders
still pursue their personal, sectarian, or party interests. There
are still no examples of senior officials who have been brought
before a court of law and convicted on corruption charges.

Fourth, capacity is inadequate. Most of Iraq’s technocratic
class was pushed out of the government as part of de-Baathification.
Other skilled Iraqis have fled the country as violence has
risen. Too often, Iraq’s elected representatives treat the ministries
as political spoils. Many ministries can do little more than pay
salaries, spending as little as 10–15 percent of their capital
budget. They lack technical expertise and suffer from corruption,
inefficiency, a banking system that does not permit the transfer of
moneys, extensive red tape put in place in part to deter corruption,
and a Ministry of Finance reluctant to disburse funds.

Fifth, the judiciary is weak. Much has been done to establish
an Iraqi judiciary, including a supreme court, and Iraq has
some dedicated judges. But criminal investigations are conducted
by magistrates, and they are too few and inadequately
trained to perform this function. Intimidation of the Iraqi judiciary
has been ruthless. As one senior U.S. official said to us,
“We can protect judges, but not their families, their extended
families, their friends.” Many Iraqis feel that crime not only is
unpunished, it is rewarded.