'The end of history' and the Iraq invasion - Francis Fukuyama gives his views to Lynne O'Donnell, who covered the war in Iraq

When the major conflict of the Iraq invasion ended in April last year and the soldiers of Saddam Hussein's army shied from combat and either gave up or melted away to fight another day, the country fell into a lawless looting spree which was shocking to outsiders but which many Iraqis had expected and prepared for.

In the north of the country, families of Arabs and Kurds piled into their cars and drove as if to a picnic across the peaceful plains, past holidaying donkeys and burnt-out bunkers, to newly liberated cities, towns and villages where they filled their vehicles with whatever they could lay their hands on and made their merry way home.

One man gave me a gleeful thumbs-up from a tank he'd hotwired and was driving back to his farm where, he said, he hoped to dismantle it for spare parts.

In a frenzy of entitlement, in which people saw themselves claiming back a little of what had been taken from them for decades, every building and office associated with the former government was stripped, first of furniture, then of fittings, and finally of wiring and windows. Few were surprised by such activities.

"It's because we behave like this that Iraq needed a strong man like Saddam," a man in Mosul told me as we stood outside what had been a fine hotel and watched the crowds carry out curtains, kitchen cabinets and chandeliers.

By contrast, the Americans who moved into the Ba'athist breach seemed not to notice and then not to care that the country they had come to free from tyranny had become a study in anarchy.

Might was right, it seemed, and the bridge builders, engineers and administrators I had expected to see moving in behind the combat forces to rebuild the infrastructure were not just late, they hadn't been invited.

Post-Saddam Iraq witnessed the breakdown of institutions and the rule of law, the terrorising of the population by armed factions offering no viable political or ideological alternative, the failure of successive provisional authorities to harness public confidence, and the creation of a theatre that nurtures global terrorism.

The neoconservative project to graft democracy on to Iraq as the first step towards building a modern and stable Middle East has instead created a threat to the stability of the region and, by extension, the world.

Francis Fukuyama is among the growing chorus of philosophers and analysts now pointing the finger at the US government and saying "I told you so". He claims it should have been obvious to the US from the start of the Iraq war that any newly created Iraqi state which emerged at the end of it would be doomed to failure.

The American historian and neoconservative economic theorist, most famous for proclaiming that mankind's social, political and economic development had run its course with the fall of the Berlin Wall, has charted the breakdown of hope in Iraq and expresses his pessimism about the country's future with academic detachment.

"Just before the war, there was no 'phase four' plan," he says. "So what happened was that because of the breakdown of civil order, to the extent that there was a state, it disintegrated. It turned into a situation where you had a fairly developed, pretty strong state compared to others in the Arab world, and overnight it turned into a stateless society.They [the Bush administration] didn't anticipate the actual deconstruction of the state, with all the looting that happened in the immediate aftermath, and there was no time to impose martial law and curfews so they could keep control. If the people who had planned the post-war had gone on more of the failed state experience of the Clinton years - Somalia, Bosnia, Kosovo, East Timor, etc - I think they would have seen that this was going to be an immediate problem."

Blinded by a belief that Iraq would mirror Eastern Europe, where the upper echelons of government were removed while the state was held together by strong institutions, the Pentagon thought the job would be completed within months, with a massive troop drawdown following on the heels of a newly installed Iraqi government.

Fukuyama, the darling of the neoconservative intellectuals, believes that history will add Iraq to the already long list of American intervention failures.

The modern phenomenon of the failed state is a topic that has fed Fukuyama's latest thesis, detailed in his new book, State Building: Governance and World Order in the Twenty-First Century, a collection of essays on why nation-building has become an essential task of the post-communist age, and how it should be pursued if it is to be successful.

The book is, he says, a natural follow-up to the study that catapulted him to international fame but which, by its title alone, has exposed him to question, sometimes verging on ridicule, since the rise of global Islamist terrorism and the attacks of September 11th, 2001. The End of History and the Last Man posited that the end of communism was irrefutable evidence that history was heading not towards socialism but towards bourgeois liberalism, that the desire for democracy as the natural human condition had prevailed.

Some of his detractors noted that the fall of communism had removed the constraints of strong government that had held the proclivity for religious, ethnic and nationalist conflict in check. And that with the fall of the Berlin Wall we had witnessed not an end to history but, rather, a return to it.

The carnage that followed in the Balkans, in the US with the terrorist attacks of 9/11, Afghanistan, and Iraq, has done little to convince Fukuyama that he was wrong, contrary to many people the world over who think he called it, if not incorrectly then perhaps a little early.

His fame, which he says was never an aim but does at least open doors, plucked him from the obscurity of Washington policy planning and into the world of armchair celebrity and bestseller lists. He is currently professor of international political economy at the school of advanced international studies at Johns Hopkins University. His theories on the impact of scientific advances, notably genetics, is explored in Our Posthuman Future: Consequences of the Biotechnology Revolution.

State Building does not develop Fukuyama's earlier controversial "end of history" theme, but concerns a topic that has become part of the international political conversation, albeit outside the US state department and the Pentagon: how to rebuild failed states in a way that ensures institutional strength. In other words, how do wealthy Western nations help them ape the success of post-war Germany and Japan, and avoid the failures of Nicaragua, Rwanda, Liberia and East Timor, to name just a few?

Fukuyama suggests it is essential to find a balance between multinational institutionalisation - as, for example, with banks, which function in much the same way the world over - and health, education and legal systems that require reference to cultural norms.

A balance between what he calls a government's strength and scope must also be struck in order to avoid Enron-type debacles resulting from a hands-off regulatory approach, on the one hand, and the inability of weak states, such as those in post-Soviet Central Asia, to perform simple tasks such as issuing business licences inside six months.

The key, he suggests, is to create durable institutions and, surprisingly, he holds up as an example the methods of British imperialists who stayed on in their colonies to work within and through the systems they created.

Here is the contrast to Iraq, where the modern imperialists of the US have not only failed to rebuild the fundamental trappings of statehood - security, law, utilities - but have laid the groundwork for the country to become an exporter of Islamic terrorism to the rest of the world, a "self-fulfilling (pre-war) prophesy".

Underlying Fukuyama's obsession with Iraq - which he says in Washington "dominates every conversation about anything, even baseball, within 30 seconds" - is the inability of regional neighbours such as Saudi Arabia, Syria and Egypt to deal with their political and economic failings, which will have an effect on Iraq's political transition.

"I'm not that optimistic about Iraq in the long run," he says. "I don't think there are going to be American troops there in five years. It won't be the result of our decision, the politics there are not going to support a Korea- or Japan-style permanent security relationship. This is a problem because once you cut them loose completely, it's really up in the air what happens politically.

"But that's one thing that should have been thought about a little more before they went in in the first place. If you look at the history of American nation- building efforts, there have been 18 to 20 of them in the 20th century, beginning with the Philippines. I would count three or four as unqualified successes: Germany, Japan, South Korea and maybe Italy. In all those cases, our troops never left, they are still in all four of those countries.

"In all the cases where we stayed five years or less, we had no lasting impact in creating institutions, and in a couple of cases, like Nicaragua, you could argue that we made things worse.

"We should not presume that the US is going to be heavily involved in Iraq for an extended time, like five to 10 years. And then the question is not whether you get democracy, but whether you get stability. If I was betting my own money, I wouldn't bet a lot."

• State Building: Governance and World Order in the 21st Century, by Francis Fukuyama, is published by Profile Books, £15.99 hardback