Kill your dictator
In “Hit or Miss? The Effect of Assassinations on Institutions and War,” Olken and Jones looked at the effects of political assassination, using a strict empirical methodology that takes into account economic conditions at the time of the killing and what Olken calls a “novel data set” of assassination attempts, successful and unsuccessful, between 1875 and 2004.
Olken and Jones discovered that a country was “more likely to see democratization following the assassination of an autocratic leader,” but found no substantial “effect following assassinations—or assassination attempts—on democratic leaders.” They concluded that “on average, successful assassinations of autocrats produce sustained moves toward democracy.”
From a profile of Ben Olken in the American. And here's the paper (free access).
So it really would have been a lot cheaper to either pay Saddam the $1B for which he asked to leave, or find someone who would have killed him for anywhere around that level.
The clear conclusion is that Israel should privatize the Mossad and hire them out. (Of course, the British would probably do the same—but the worst case scenario there is competition, which drives down the cost of creating democracy. Although, since it would have to be a well-run assassination squad, there would be significant barriers to entry [read: CIA need not apply, not having done anything successfully since 11 Sep 1973], and the price would still be fairly high.)