When you walk the streets in Baghdad, there is something noticeably missing: supermarkets. There are small convenience stores which sell sodas and water, some fruit stands, and the occasional café, but no grocery stores sufficient to meet the food requirements of the local population. The reason, as explained to me by Col. Ferrari, a security planner for the military, is that Iraqis do not pay for food. Rather, they receive an allotment of food for the month. The U.S. had considered giving the people a fixed monthly stipend for food, but opted instead to do the actual food distribution, which I believe is similar to the system utilized by the former regime.
Of course, distribution issues exist not only with electricity and food, but also with fuel. Because of the refining capacity in Iraq was not sufficient to accommodate post-war consumption, the U.S. imported large amounts of fuel. They then all but gave the fuel away (I believe that once again Iraqis are not accustomed to paying for fuel), charging something like a penny per liter for fuel. It did not take long for the Iraqis to realize, however, that they could resell the fuel at huge profits in Jordan and Kuwait, where the fuel was purchased to begin with. So the fuel was being exported as soon as it was imported.
These are just a few of the issues facing the country in reconstruction. Reminiscent of the fall of the Soviet block, the people here were and largely still are dependent on the government for the basics of life. And of course, when the people are this dependent on the government, shifts to more capitalistic and democratic systems are, while not impossible, certainly more difficult.