Since Arend Lijphart's development of the theory of consociationalism in 1969, dominant schools of thought have accepted that ‘power sharing’ and ‘group autonomy’ are the basic preconditions of democratic governance in divided societies. The constitution and electoral framework adopted by post-invasion Iraq instituted many of Lijphart's recommendations, including proportional representation, federalism and a parliamentary system with a weak presidency. But this democratic framework has failed Iraq. Eight months on from its 2010 parliamentary election and still struggling to establish an effective government, Iraq is facing constitutional crisis. This article uses the case study of Iraq to uncover fundamental flaws in orthodox arguments about democracy in divided societies and it goes on to recommend changes that would better enable stable and effective governance.