Who lost Iraq? This blame game will be the stuff of U.S. electoral politics for the next decade, but for now the military and diplomatic failings of the Bush administration have seemed explanation enough. A foolish venture in regime change morphed into a ruinous effort at nation building that now stands on the brink of nation collapse. The breadth of U.S. failure is the stuff of daily headlines and dozens of books by journalists. Despite the excellence of some of these efforts, they don’t get beyond the narcissistic nationalism that supposes the last superpower is alone capable of such a debacle. Not so, according to Ali A. Allawi: we had help from the Iraqis themselves, both friends and foes.

Allawi is an Iraqi, educated in England and the United States, who returned in September 2003 to the country he first left as an eleven-year-old. In 2003-04, he served as minister of trade and then minister of finance, and in 2005 he was elected to the Iraqi Transitional National Assembly, which followed the Coalition Provisional Authority (CPA). His insider’s account confirms and adds to the list of culprits and causes. He personally witnessed the arrogance and incompetence of CPA head Paul Bremer and the futility of catch-up policies devised in Washington that never caught up with the postinvasion chaos, the emerging insurgency, or the sectarian civil war. Many Iraqi exiles, long gone from their country, had little idea of actual conditions but did not hesitate to offer themselves as the new political class. Many well-placed, in-country Iraqis quickly took advantage of new resources and clueless occupation leaders. Allawi’s detailed analysis helps explain the depths of Iraq’s political and moral collapse.

First, Iraq was a failed state not only politically but culturally. Postinvasion events exposed an ersatz national culture in which long-standing sectarian and ethnic differences were contained by Saddam’s reign of terror. Loyalty was vested not in public institutions but in family and tribe. Operating on a top-down model, the CPA assumed that government ministries and services were sound and would continue business, albeit under new leaders, some from the exile community. Life would go on. But “official” looting and destruction of equipment and records obstructed efforts to maintain services and to assess the resources available in, for example, the oil and finance ministries. When, despite Bremer’s de-Baathification orders, many bureaucrats stayed in office, it was impossible for new leadership to gain control; some were co-opted. The national kleptocracy, which supported next of kin and not the public interest, stayed in business. Smuggling, money laundering (now with U.S. funds), and backroom deals continued with the connivance of the same Jordanian, Lebanese, and Syrian bankers who had profited under Saddam. Allawi details the loss of billions in Iraqi and U.S. funds. The ensuing shortage of oil and other fuels probably created more chaos than all the foreign fighters said to have crossed the border. For help and protection, disappointed Iraqis turned to tribal sheiks, Muslim leaders, and finally to militias.

Second, the infrastructure, material and human, was a shambles, degraded by Saddam’s reign of fraud and the effects of sanctions. The corruption of ordinary social and economic transactions, rather than being constrained by the invasion and a new regime, was given free rein. Efforts by the CPA and subsequent Iraqi governments to reboot basic systems-electricity, water, fuel, and sewerage-ran up against ill-prepared staffs and antiquated systems. Purification plants and generating stations that barely functioned under Saddam were overwhelmed not only by looting and sabotage-often, according to Allawi, by their own employees-but also by increased demand. Postliberation Iraq was flooded with consumer goods-cars, air conditioners, appliances-that required more gas, electricity, and kerosene than the system had ever produced. Technicians and engineers could neither cope with the new demand on old equipment nor run the modern systems installed by U.S. contractors. Services fell, making ordinary life, even with bribery, a constant struggle. Siphoning off power from the national grid for neighborhood use or stealing and smuggling copper tubing abroad were growth industries. Popular discontent and resentment provided support to the budding insurgency, which worked overtime to exacerbate long-standing ethnic and religious divisions.

Third, political maneuvering among the Shiites and conflict between Sunnis and Shiites put the ability to govern beyond reach. A democratic Iraq, promoted by the Bush administration, was seized upon by Grand Ayatollah Ali Al-Sistani, the spiritual leader of the long-oppressed, majority Shiites. This convergence with Washington’s policy did not produce the prescribed Western model. Iraqis democratically elected a majoritarian Shiite government bent on creating an Islamist state over the resistance of the Sunnis and secularists. Now not even Sistani can quell the spirit of score-settling and indifference to minority rights that has paralyzed the government. The Kurds support this government while waiting for the de facto autonomy they already exercise to become de jure in a federal, decentralized state. The returned exiles, many of them secular, have been marginalized and, like Allawi, gone “home.”

As a minister and elected member of the transitional government, Allawi was privy to many of the decisions, discussions, and events he describes; he is related to both Ayad Allawi, a CIA favorite and head of the transitional government, and Ahmad Chalabi, a Pentagon favorite and an influential proponent of the invasion. An insider without an ax to grind-unless it be the obligation of mea culpa-Ali Allawi marshals his facts as a scholar and cites extensive personal interviews for his claims.

A deep sadness pervades the book’s preface, in which Allawi explains his commitment to a liberated Iraq while acknowledging the terrible failure that Americans and Iraqis share. Different motives and justifications may have prompted each to act, but, as Allawi grimly admits, arrogance and ignorance came together in a perfect storm, leaving 25 million people more burdened and fearful than ever.