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Will Democracy Solve Iraq's Problems?

Since Saddam Hussein has left office President Bush has promised "We will not impose any form of government on Iraq. We will help Iraq to build a government of, by, and for the Iraqi people."  But what government is the best form for a faltering country?  Democracy?  Monarchy?  Are the people ready for a new and liberated government? 

Many of economists think that democracy comes from growth.  Not growth from democracy.  In the review of the book The Future of Freedom, The Wall street Journal Chief editor, William McGurn says "Want your country to develop? Assuming you're not fighting a war, civil or otherwise, pretty much all it takes is the rule of law plus a sound currency. Plainly societies have managed to achieve economic success (think Suharto's Indonesia) without genuine democracy. But the record from Taiwan to Chile increasingly suggests that the inevitable byproduct of a society that creates sustained affluence will be a middle class less willing to be patronized by an unaccountable government."

Thomas Carothers, director of the Democracy and Rule of Law Project at the Carnegie Endowment for International Peace said that Iraq was in "an undemocratic neighborhood" and that "no countries with oil economies have been democratic."

Maybe democracy isn't the best solution.  Egypt has a strong government and it's not a democracy.  Great Britain has Parliamentary monarchy. The  most important thing could be Iraq's institutions.  David Wessel explained the importance of  institutions in his article Strong Institutions Will Help Iraq Be a Prosperous Nation.  "The economic riddles of the past decade are reviving interest in the role of institutions. Why did Poland and Latvia do so much better than Russia in the transition to capitalism? Why did the embrace of textbook macroeconomic policies fail to deliver prosperity in so much of Latin America? Why did East Asia stumble? Why do some African countries continue to do so much better than others?"

The answer lies somewhere in what's good for the people, if they are ready to accept democracy, how the people will respond to new institutions and if the will be set up to work.  Democracy doesn't solve problems, institutions solve problems and then institutions create the foundation for democracy.