The thesis is that democracy is the most effective antidote to the kind of Islamic radicalism that hit the US on 9/11. Its exponents begin with the premise that tyranny cannot tolerate the public expression of social resentment that its abuses naturally produce. To preserve its grip, tyranny must therefore crush even modest stirrings of opposition, repressing dissidents and critics, with unstinting ferocity if need be. In the age of globalisation, however, repressed rebellions do not simply die out. They splash uncontrollably across international borders and have violent repercussions abroad. Middle Eastern rebellions have been so savagely and effectively repressed that rebels have been driven to experiment with an indirect strategy to overthrow local tyrannies and seize power. They have travelled abroad and targeted those they see as the global sponsors of their local autocrats.Fukuyama goes on to describe how the Bush administration's policy in Iraq and the in the Middle East generally has strayed from the neocon theory in critical ways (for example that their actual approach to promoting democracy in the Middle East was foolish and ineffective).
There is some merit to the theory as Fukuyama presents it. I think it stops at least one step too soon, however. There are geopolitical (and probably socioeconomic) considerations driving anti-Americanism that pass beyond redirected frustration with local tyrants. Palestine is an obvious example, but there are others. These issues need to be dealt with as well, and part of the value of democratization is to bring those issues to the forefront and provide a venue for them to be addressed. The Fukuyama's theory is laudable in that it perceives that the focus of this conflict should be on people, rather than states, and that non-democratic states can serve as roadblocks to us reaching the people. But I think his analysis of what is driving those people falls short. Democracy is a step in the process, not the endgame.
The conflict this summer in Lebanon provides a good example of this. When Israel mounted its offensive on Lebanon, this was an issue the US needed to address if we were serious about dealing with terrorism's root causes. But because we were insulated from popular opinion by the tyrannical governments of our Middle Eastern "allies", and because the administration does not see addressing popular political concerns as part of the neocon mission statement, we completely failed to confront the issue.
It is not good enough to push for democracy, then simply abandon the governments that result from that democratic process as we've done in Palestine and Lebanon. Grievances that arise from a legitimate democratic process should be taken seriously. And to the extent that there is actual merit behind those grievances we need to take steps to address them in order to buy the political capital we need to credibly dismiss those grievances that don't have merit. I'm not sure Fukuyama's neocon theory is any better than the Bush administration's theory on that point.