Three years ago, Americans swarmed into Iraq and began talking of the need for "civil society and democracy." Most Iraqis had heard of democracy before, and hoped it would work for them. But far fewer Iraqis knew what "civil society" was. It's a term for what people in functioning democracies take for granted. Put simply, civil society is a population that generally obeys the law, supports the government and, in general, provides an environment where democracy works and an economy can thrive. A good civil society also contains a free press and lots of social critics. As a result, civil society is always criticizing itself, which is sort of a renewal function. You most notice how effective your own civil society is when you go somewhere that doesn't have one. At the moment, Iraqis are coming to realize how the corruption, factionalism and tolerance for criminal behavior are preventing the formation of their own civil society. Worse yet, you cannot have civil society given to you, or go buy it. The people have to want it, and do what needs to be done to make it happen. That has not occurred yet.
An example of civil society problems has been the increasing clashes between Iraqi police and military units. Some of these may be tied to the efforts of corrupt unit commanders to improve their take by muscling in on someone else's operation. But some incidents have been characterized by clashes between units that have mostly Sunni personnel and units with mostly Shia personnel. The police, being local, are usually all Shia, Sunni Arab or Kurd (who are Sunni, but hate and despise Sunni Arabs). That has made it easy for warlords, gang bosses and political parties to take over local police, and some special police units (the commandoes and SWAT outfits.) The army is more integrated, and less corrupted by factional politics. The army is often called in by the government when local police are out of control (in the criminal or political sense), but army and police will often clash simply because cops tried to scam or bully soldiers.
The deterioration of the infrastructure is apparently reaching crisis levels. Electrical power has still not returned to pre-2003 levels, and regional blackouts are common. In addition, supplies of oil and propane for household use have been declining, and the price rising; reportedly a tank of propane is now running at about three times what it cost just a few months ago. Both problems are partially the result of terrorist attacks against the electrical grid and production facilities. But the situation is complicated by a shortage of funds for maintenance and reconstruction, and by corruption, particular in the fuel industry, where a sizable proportion of available supplies are being diverted into the black market. The terrorists have joined forces with the fuel gangs, who both steal petroleum products, but run the black market which sells the stuff back to Iraqis at higher prices. The black market would largely disappear if the government sold fuel for the same prices as adjacent countries (and the Iraqi black market), but that would be politically unpopular. Iraqi believe cheap fuel, even if unavailable, is a basic right.
The terrorists and criminal gangs, as is the case in many parts of the world, have become partners. You will find many men working both sides of this street. The terrorists have long used criminals as subcontractors. To create a civil society in Iraq will require suppression of the criminal, and terrorist, gangs.