After the US‐led invasion of Iraq, the Kurdistan Region of Iraq (KRI) appeared to be on a path toward consolidation of liberal democracy. While the rest of Iraq drifted into chaos and civil war, the KRI remained quiescent and was for many years hailed by outsiders as: “a beacon of hope”, “an oasis of stability and democracy”. The region adopted the principles of press freedoms, religious tolerance, and good governance to conform with United States (US) and western incentives. The adoption of procedural democracy, however, concealed an underlying system of rigid social regulation based on a two‐party power sharing agreement that resisted democratization while appropriating its parlance and institutional structures. The government's resistance to liberalization along with its lack of resilience to political and economic shocks promoted popular disillusionment with the Kurdish nation‐building project with the region's dominant political parties at the center. In response, the ruling parties have sought to exert influence through alternatives to the democratic process that reinforce partisan rule. This article argues that economic crisis and austerity have precipitated the expansion in the scope of dissent and hastened the demise of the power sharing arrangement in the KRI. The ruling political parties have since employed a variety of undemocratic means to manage popular grievances. However, these responses do not address significant public concerns regarding freedom of expression, unemployment, and governance issues.