Here’s a good article by Mehdi Hasan debunking the “obligatoriness” of Caliphate based on the primary textual sources of the Quran and Sunnah. Well worth reading.
Many Muslims fall back on a romanticised view of the very first community of believers in 7th-century Medina, ruled by the Prophet himself, and cite it admiringly as their precedent for an Islamic state, but this approach is flawed. First, any historical precedent that revolves around the presence of a divinely guided prophet-as-political-leader seems wholly irrelevant, in an era in which we have no divinely guided prophet to lead us.
Second, the Medina “state” should be seen as a purely political and pragmatic, rather than Islamic or religious, construct. The celebrated pact that the Prophet signed with the various tribes of Medina involved the non-Muslims of the city – chief among them the Jews, who were granted formal equality with the Muslims – recognising only his political and temporal, rather than his religious or spiritual, authority. As the historian Bernard Lewis puts it: “Muhammad became a statesman in order to accomplish his mission as a prophet, not vice versa.”
Third, Medina lacked fixed borders, a standing army, a police force, permanent civil servants, government ministries, foreign ambassadors and a public treasury. To pretend that it can serve as a practical model for the large, complex, post-industrial societies of the 21st century is fanciful.
Today it is difficult, if not impossible, to identify a Muslim-majority nation that could plausibly be identified as a modern, viable and legitimate “Islamic state”. Sunni Saudi Arabia and Shia Iran both loudly proclaim themselves to be such, but to each other they are heresies; they are also dictatorial regimes with terrible human-rights records. How about the Islamic Republic of Pakistan, blighted by military rule for much of its history? Or Sudan, accused of committing crimes against humanity among its own Muslim population in Darfur?
Not surprisingly, Professor An-Na’im concludes that “the Islamic state is a historical misconception, a logical fallacy and a practical impossibility”.