Libertarian purists and true conservatives would agree that an idea such as using Iraq as an examplar of freedom and democracy in the Middle East is too grand for a mortal government to achieve. Normally I would agree that any type of social or economic engineering is doomed to failure by nature of humanity's inherently limited understanding.
Here's the hedge: there is a type of system that can theoretically be delivered onto a populace with reasonable expectation that it will work due to the fact that it has worked in the past. That is the free market system. It is the imposing of restrictions that result in unforseen consequences and calls for new measures to fix the new problems, new measure that inevitably come with unforseen consequences of their own. By releasing strictures, the rules become simple enough that people can come to learn them and forcast far enough ahead to make reasonably accurate predictions of the future. Brian Micklethwait of Samizdata has a very good article, How Hockey Sticks Explain the Relative Attractions of Statism and Free Markets, that shows how the true costs and benefits of economic systems are typically disguised by transient changes in the opposite direction.
I have written before about how what results of a given politician's economic policies will not be realized typically until well after that politician's term in office has ended. I am coming to believe that the "blade" of the graph coincides nicely with American politic's four-year cycle. From where I sit, that's just another reason for government to get the hell out of economics.
When it comes to Iraq, the US acted in what it believed was its own best interests, both in removing Hussein and attempting to create the examplar. I do believe that things will get worse for the Iraqis in the short term, but the long term holds promise beyond the imaginings of Iraq if Saddam was still in power.
Sadly, I do think that things will get worse for Iraq before they get better. If the course is stayed, however, the people of Iraq will learn how to take care of themselves uder the free market, and their lives will ultimately be unimaginably better than if the Hussein regime had continued.