The next few weeks promise to be monumental ones in Iraq's modern history. With the December election successfully completed, Iraqi leaders must now focus on making decisions that will determine not just how the country is run over the next four years, but what Iraq will look like in the longer term and whether it can avoid disintegrating into a bloody civil war.

Whether Iraq's political leaders, led by Prime Minister-designate Ibrahim Jaafari, are up to the task is unclear. They have managed an 18-month transition according to schedule, but much of the credit for that must go to officials from Washington and London. Moreover, process has consistently trumped outcome as the key measure of success for U.S. and UK leaders desperate to show that their efforts were producing results in Iraq.

The costs of this political expediency will become clearer as Iraqis go about the business of choosing a new government and reviewing key areas of their recently ratified constitution. With the transition over and no prospect of a new round of elections in a few months, the stakes are now higher. Political parties are playing for keeps, knowing that what is before them is nothing less than an opportunity to shape the Iraqi polity and economy to their advantage.

If Iraq is to be able to shake off instability, its new leaders will need to achieve two objectives. First, they must work out a formula for genuine national reconciliation that gives all of Iraq's different groups (ideological groups, as well as ethnic and sectarian ones) a stake in the country's future. Second, they must create a functioning state that can meet the expectations of the population.

Precedent does not bode well on either score. That Iraq lacks its own Nelson Mandela is an understatement. Political leaders have consistently adopted a zero-sum approach to political bargaining, viewing compromise as a last resort. While the United States called the shots it could insist on reaching consensus among the different groups, as it did in negotiating the Transitional Administrative Law. Left to their own devices, Iraqi leaders have been less harmonious. The Shiite-led United Iraq Alliance and Kurdish Alliance have reached workable arrangements, but only by agreeing to disagree. Kurdish leaders are content to go along with the Shiite insistence on majority rule and more Islam in government as long as it does not apply to their region. And both groups have been willing to let representatives of Iraqi Sunni community into government just so long as they acquiesce to a status quo that threatens to marginalize their interests in the long term.

This is a long way from the national compact laid out in the Bush administration's National Strategy for Victory in Iraq, which Ambassador Zalmay Khalilzad is working assiduously to achieve. In contrast to most of his predecessors, Khalilzad appears to recognize that simply having the right communal quotas will not produce stability. Creating a governing coalition that reflects a broad spectrum of political views—and gives them all equal weight—is key, even if this means bringing in some undesirables.

The alternative is an escalation of internecine violence into a full blown civil war and the eventual fragmentation of Iraq along ethnic and sectarian lines. Such an outcome is not an historical inevitability as some have argued. Even now, beyond the Kurdish regions, a strong sense of Iraqi identity exists. Politics have certainly become based more on sect and ethnicity, as the recent elections demonstrated, but part of this was a natural response to the effective dismantling of the state after April 2003. Lacking national institutions to provide security and services, local populations have been vulnerable to armed sectarian and ethnic parties that have stepped in to fill the vacuum.

Indeed, whether Iraq's state institutions can be revived will be as important to long-term stability as any political accord. Beginning with the Coalition Provisional Authority, successive post-war governments—including Jaafari's most recent one—have failed to deliver the basic welfare demands of the Iraqi people. Nor has the creation of effective institutions and administrative capacity been a priority for political leaders, Iraqi or otherwise. Instead, ministries' offices in Baghdad and the provinces have become extended political party fiefdoms.

Left unresolved, this situation threatens to produce a different sense of disenfranchisement among Iraqis, not one based on communal identity but rather a more collective disenchantment with the political system as a whole. Decentralization will not solve this problem if local administrations are merely microcosms of their national counterparts. Iraqis have shown a tremendous amount of patience with their political leaders in the past, as well as persistent optimism in the face of adversity. But unless their leaders show some practical signs of making the lives of the population better, the patience of Iraqis will eventually wane, with disastrous results.

Raad Alkadiri is Director of Middle East and Africa in the Country Strategies Group at PFC Energy in Washington, DC.