Now for the third reason the occupation of Iraq wound up being such a rousing success: The policies enacted by the denizens of the Emerald City.

Over the summer of 2003, the Coalition Provisional Authority’s Policy Planning Office created a 28-page list of milestones that were to be accomplished before sovereignty was returned to the Iraqi people. The document was divided into three phases: August to October 2003, November 2003 to January 2004, and February 2004 onward. The list of milestones became the playbook for Americans in Baghdad.

The very first goal was to “defeat internal armed threats.” The task was assigned to the military. All the bad guys were to be taken care of in the first phase, by October 31. Power generation was to reach 5,000 megawatts by January, even though engineers couldn’t keep the systemabove 4,000. The airport was to open by October, despite warnings that the insurgents had hundreds of shoulder-fired antiaircraft missiles.

Privatization of state-owned enterprises was to begin by October. A trust fund modeled after one in the state of Alaska was to be established to provide Iraqis with annual cash rebates from oil sales. Monthly food rations were to be converted into cash payments by November. (Some economists in the Emerald City wanted to disburse the payments with “smart cards,” neglecting to realize that most Iraqis had never seen credit cards and that most merchants didn’t have the means – no power or phone lines – to accept them.) The subsidies, along with belowmarket prices for gasoline and electricity, were to be eliminated after February. Iraq was to prepare to join the World Trade Organization, which meant the elimination of tariffs, the creation of new laws to protect businesses, and the entry of foreign-owned banks.

On the political front, Bremer's plan was just as ambitious. Before sovereignty could be returned to the Iraqis, Bremer's Governing Council would have to select a committee to draft a constitution, a constitution would have to be written, then it would have to be approved in a national referendum, and then national elections would be held for a new government. Only then would he turn over power.

Before Bremer left, he would sign a hundred executive orders. Some were essential. Order 96 established rules for elections. Order 31 modified the penal code. Order 19 guaranteed freedom of assembly. But many others were aspirational or just plain unnecessary in a nation wracked by a violent insurgency. Order 81 revised Iraq's laws governing patents, industrial design, undisclosed information, integrated circuits, and plant varieties. Order 83 revised the copyright law. Order 59 detailed protections for government whistleblowers. Order 66 created a public service broadcasting commission.

It wasn't just Bremer. His ambition infected almost everyone else in the CPA's headquarters.

* * *

Jay Hallen decided that he didn't just want to reopen the exchange. He wanted to promulgate a new securities law that would make the exchange independent of the Finance Ministry, with its own bylaws and board of directors. He wanted to set up a securities and exchange commission to oversee the market. He wanted brokers to be licensed and listed companies to provide financial disclosures. He wanted to install a computerized trading and settlement system.

Iraqis cringed at Hallen's plan. Their top priority was reopening the exchange, not setting up computers or enacting a new securities law. "People are broke and bewildered," broker Talib Tabatabai told Hallen. "Why do you want to create enemies? Let us open the way we were."

Tabatabai, who held a doctorate in political science from Florida State University, believed Hallen's plan was unrealistic. "It was something so fancy, so great, that it couldn't be accomplished," he said.

But Hallen was convinced that major changes had to be enacted. "Their laws and regulations were completely out of step with the modern world," he said. "There was just no transparency in anything. It was more of a place for Saddam and his friends to buy up private companies that they otherwise didn't have a stake in."

Opening the stock exchange without legal and structural changes, Hallen maintained, "would have been irresponsible and short-sighted."

To help rewrite the securities law, train brokers and purchase the necessary computers, Hallen recruited a team of American volunteers. In the spring of 2004, Bremer approved the new law and simultaneously appointed the nine Iraqis selected by Hallen to become the exchange's board of governors.

The exchange's board selected Tabatabai as its chairman. The new securities law that Hallen had nursed into life gave the board control over the exchange's operations, but it didn't say a thing about the role of the CPA adviser. Hallen assumed that he'd have a part in decision-making until the handover of sovereignty. Tabatabai and the board, however, saw themselves in charge.

Tabatabai and the other governors decided to open the market as soon as possible. They didn't want to wait several more months for the computerized trading system to be up and running. They ordered dozens of dry-erase boards to be installed on the trading floor. They used such boards to keep track of buying and selling prices before the war, and that's how they'd do it again.

The exchange opened two days after Hallen's tour in Iraq ended. Brokers barked orders to floor traders, who used their trusty white boards. Transactions were recorded not with computers but with small chits written in ink. CPA staffers stayed away, afraid that their presence would make the stock market a target for insurgents.

When Tabatabai was asked what would have happened if Hallen hadn't been assigned to reopen the exchange, he smiled. "We would have opened months earlier. He had grand ideas, but those ideas did not materialize," Tabatabai said of Hallen. "Those CPA people reminded me of Lawrence of Arabia."

* * *

Jim Haveman arrived in Iraq with his own priorities. He liked to talk about the number of hospitals that had reopened since the war and the pay raises that had been given to doctors instead of the still-decrepit conditions inside the hospitals or the fact that many physicians were leaving for safer, better paying jobs outside Iraq. He approached problems the way a health care administrator in America would: He focused on preventive measures to reduce the need for hospital treatment.

He urged the Health Ministry to mount an anti-smoking campaign, and he assigned an American from the CPA team -- who turned out to be a closet smoker himself -- to lead the public education effort. Several members of Haveman's staff noted wryly that Iraqis faced far greater dangers in their daily lives than tobacco. The CPA's limited resources, they argued, would be better used raising awareness about how to prevent childhood diarrhea and other fatal maladies.

Haveman didn't like the idea that medical care in Iraq was free. He figured Iraqis should pay a small fee every time they saw a doctor. He also decided to allocate almost all of the Health Ministry's $793 million share of U.S. reconstruction funds to renovating maternity hospitals and building new community medical clinics. His intention, he said, was "to shift the mind-set of the Iraqis that you don't get health care unless you go to a hospital."

But his decision meant there were no reconstruction funds set aside to rehabilitate the emergency rooms and operating theaters at Iraqi hospitals, even though injuries from insurgent attacks were the country's single largest public health challenge.

Haveman also wanted to apply American medicine to other parts of the Health Ministry. Instead of trying to restructure the dysfunctional state-owned firm that imported and distributed drugs and medical supplies to hospitals, he decided to try to sell it to a private company.

To prepare it for a sale, he wanted to attempt something he had done in Michigan. When he was the state's director of community health, he sought to slash the huge amount of money Michigan spent on prescription drugs for the poor by limiting the medications doctors could prescribe for Medicaid patients. Unless they received an exemption, physicians could only prescribe drugs that were on an approved list, known as a formulary.

Haveman figured the same strategy could bring down the cost of medicine in Iraq. The country had 4,500 items on its drug formulary. Haveman deemed it too large. If private firms were going to bid for the job of supplying drugs to government hospitals, they needed a smaller, more manageable list. A new formulary would also outline new requirements about where approved drugs could be manufactured, forcing Iraq to stop buying medicines from Syria, Iran and Russia, and start buying from the United States.

He asked the people who had drawn up the formulary in Michigan whether they wanted to come to Baghdad. They declined. So he beseeched the Pentagon for help. His request made its way to the Defense Department's Pharmacoeconomic Center in San Antonio.

A few weeks later, three formulary experts were on their way to Iraq.

The group was led by Theodore Briski, a balding, middle-aged pharmacist who held the rank of lieutenant commander in the U.S. Navy. Haveman's order, as Briski remembered it, was: "Build us a formulary in two weeks and then go home." By his second day in Iraq, Briski came to three conclusions. First, the existing formulary "really wasn't that bad." Second, his mission was really about "redesigning the entire Iraqi pharmaceutical procurement and delivery system, and that was a complete change of scope -- on a grand scale." Third, Haveman and his advisers "really didn't know what they were doing."

Haveman "viewed Iraq as Michigan after a huge attack," said George Guszcza, an Army captain who worked on the CPA's health team. "Somehow if you went into the ghettos and projects of Michigan and just extended it out for the entire state -- that's what he was coming to save."

Haveman's critics, including more than a dozen people who worked for him in Baghdad, contend that rewriting the formulary was a distraction. Instead, they said, the CPA should have focused on restructuring, but not privatizing, the drug-delivery system and on ordering more emergency shipments of medicine to address shortages of essential medicines. The first emergency procurement did not occur until early 2004, after the Americans had been in Iraq for more than eight months.

Haveman insisted that revising the formulary was a crucial first step in improving the distribution of medicines. "It was unwieldy to order 4,500 different drugs, and to test and distribute them," he said.

When Haveman left Iraq, Baghdad's hospitals were as decrepit as the day the Americans arrived. At Yarmouk Hospital, the city's largest, rooms lacked the most basic equipment to monitor a patient's blood pressure and heart rate, operating theaters were without modern surgical tools and sterile implements, and the pharmacy's shelves were bare.

Nationwide, the Health Ministry reported that 40 percent of the 900 drugs it deemed essential were out of stock in hospitals. Of the 32 medicines used in public clinics for the management of chronic diseases, 26 were unavailable.

The new health minister, Aladin Alwan, beseeched the United Nations for help, and he asked neighboring nations to share what they could. He sought to increase production at a state-run manufacturing plant in the city of Samarra. And he put the creation of a new formulary on hold. To him, it was a fool's errand.

"We didn't need a new formulary. We needed drugs," he said. "But the Americans did not understand that."

* * *

Had Iraq been a thoroughly defeated aggressor nation that had no choice but to have a foreign power remake its government -- like Japan or Germany after World War II -- and had there been enough troops on the ground to sustain an open-ended occupation, then, perhaps, this strategy could have worked. But the Iraqis, obviously, didn't see themselves as a vanquished nation in need of an overhaul at the hands of foreigners.

Shortly before the handover of sovereignty in June 2004, I met Adel Abdel-Mahdi, the political leader of the Supreme Council for Islamic Revolution in Iraq, for breakfast in the front courtyard of his modest house. As we nibbled from a plate of dates and pastries, I asked him what the CPA’s biggest mistake had been. He didn’t hesitate. “The biggest mistake of the occupation,” he said, “was the occupation itself.”

He, of course, had wanted the United States to anoint exiled politicians as Iraq’s new rulers in April 2003, a clearly self-interested position. But his self interest aside, what he said was true. Freed from the grip of their dictator, the Iraqis believed that they should have been free to chart their own destiny, to select their own interim government, and to manage the reconstruction of their shattered nation.

Iraqis needed help—good advice and ample resources—from a support corps of well-meaning Americans, not a full-scale occupation with imperial Americans cloistered in a palace of the tyrant, eating bacon and drinking beer, surrounded by Gurkhas and blast walls.

The compromise between their desire for self-rule and the absence of a leader with broad appeal could have taken many forms, as some at the State Department’s pointed out over the months after the invasion: a temporary governor appointed by the United Nations, an interim ruling council, or even a big-tent meeting—similar to the loya jirga convened after the defeat of the Taliban in Afghanistan—to select a crop of national leaders. There certainly was a role for a tireless, charismatic American diplomat to shepherd the process. It could easily have been Bremer, with a different title and a shorter mandate, with a viable political plan and meaningful resources for reconstruction.

Would that have made a difference? We’ll never know for sure, but doing a better job of governance and reconstruction almost certainly would have kept many Iraqis from taking up arms against their new leaders and the Americans. There still would have been an insurgency, led by zealots who saw no room for compromise, but perhaps it would have been smaller and more containable.

“If this place succeeds,” a CPA friend told me before he left, “it will be in spite of what we did, not because of it.”

One addendum: Michiko Kakutani reviewed my book in The New York Times today.