Bush’s rhetoric about democracy came to sound as bitterly ironic as his pumped-up appearance on an aircraft carrier a few months earlier, in front of an enormous banner that declared MISSION ACCOMPLISHED. And yet it has to be said and it should be understood—now, almost seven hellish years later—that something that looks mighty like democracy is emerging in Iraq. And while it may not be a beacon of inspiration to the region, it most certainly is a watershed event that could come to represent a whole new era in the history of the massively undemocratic Middle East.

The elections to be held in Iraq on March 7 feature 6,100 parliamentary candidates from all of the country’s major sects and many different parties. They have wildly conflicting interests and ambitions. Yet in the past couple of years, these politicians have come to see themselves as part of the same club, where hardball political debate has supplanted civil war and legislation is hammered out, however slowly and painfully, through compromises—not dictatorial decrees or, for that matter, the executive fiats of U.S. occupiers. Although protected, encouraged, and sometimes tutored by Washington, Iraq’s political class is now shaping its own system—what Gen. David Petraeus calls “Iraqracy.” With luck, the politics will bolster the institutions through which true democracy thrives…

What outsiders tend to miss as they focus on the old rivalries among Shiites, Sunnis, and Kurds is that sectarianism is giving way to other priorities. “The word ‘compromise’ in Arabic—mosawama—is a dirty word,” says Mowaffaq al-Rubaie, who served for many years as Iraq’s national–security adviser and is running for Parliament. “You don’t compromise on your concept, your ideology, your religion—or if you do,” he flicked his hand dismissively, “then you’re a traitor.” Rubaie leans in close to make his point. “But we learned this trick of compromise. So the Kurds are with the Shia on one piece of legislation. The Shia are with the Sunnis on another piece of legislation, and the Sunnis are with the Kurds on still another.”…

The changes are more than superficial. As economist Douglass North pointed out last year in his influential book Violence and Social Orders, the key to building stable societies is to create a web of institutions that people can fall back on when governments, or mere politics, fail. Iraq is beginning to do just that. The country not only has the freest press in the region, but the gutsiest. More than 800 newspapers and TV and radio stations have aggressively gone after politicians and sleazy businessmen. The country now has more than 1,200 trained judges, and courts have convicted senior officials on corruption charges, with more cases pending. Women’s groups, too, have asserted themselves, pushing for 25 percent of provincial councils to be female and forcing the Education Ministry to roll back a proposal to separate boys and girls in school.