BAGHDAD—The sprawling Sadr City slum helped deliver a surprising victory in Iraqi elections for cleric Moqtada al-Sadr, the son of the man who gave the Baghdad neighborhood its name. Now, Mr. Sadr’s alliance faces a tough task: Carrying out his lofty promises of change for the urban poor.
Home to more than 3 million people—about one-third of the capital’s population—Sadr City is an extreme example of the economic ills that plague Iraq. Uncollected garbage fills the roadsides, children hawk goods to earn extra cash, and water and electricity outages are routine among the ramshackle settlements.
Six of Mr. Sadr’s allies from Sadr City won seats in the May 12 election that over half of Iraqis skipped. The results of the vote reflected disillusionment with a political class that is blamed for neglecting places like Sadr City while enriching itself.
“I have put my last hope in God and Moqtada al-Sadr ,” said Abbas Moslem, who is 29, and who said his Sadr City takeout restaurant hadn’t received electricity for four days. “There is no work or employment.”
For Sadr City, it is a rare moment of political power—and a remarkable change from the aftermath of the U.S.-led invasion in 2003, when the slum was a battleground. Back then, U.S. forces faced fierce resistance in Sadr City from Mr. Sadr’s Mahdi Army militias and considered capturing Mr. Sadr , whose fiery speeches were seen as inciting violence against coalition forces.
Now, Mr. Sadr is a political kingmaker. He formed an alliance with Iraqi communists for the recent elections, and the alliance won 54 seats in the 329-seat Iraqi parliament—more than any other bloc.
But the alliance is far short of a majority, and Mr. Sadr ’s promises to address economic woes and enact a sweeping overhaul of Iraq’s political system are running into barriers as he tries to form a government—a process that could take months. Mr. Sadr isn’t trying to become prime minister himself, preferring to remain above the political fray as a cleric.
His coalition, known as Sairun, must partner with political parties that don’t want to give up their privileges. Talks to form a government could produce a weak prime minister who can neither make sweeping changes nor tackle the country’s economic problems, analysts said.
Many Iraqis want the kinds of changes Mr. Sadr is calling for, but are skeptical. Mr. Sadr is part of the political establishment he railed against. The former governor of Baghdad, who was from Mr. Sadr ’s political bloc, was unseated after being accused of corruption, which he denied.
The biggest test facing Mr. Sadr and his allies is managing the expectations of their followers, said Jassem al-Helfi, a Sadr City native and a leading member of the Iraqi Communist Party who is involved in the negotiations to form a government.
“How can we convince our supporters that reform will not happen instantaneously?” Mr. Helfi said.
Mr. Sadr and his family are closely associated with Sadr City, where the rundown streets are decorated with pictures of the gray-bearded Mr. Sadr in his trademark black robe and turban—and of his father, Mohammed Sadeq al-Sadr, who was murdered in 1999 for his opposition to Saddam Hussein.
The neighborhood in eastern Baghdad was developed in 1959 by Prime Minister Abd al-Karim Qassem, who overthrew the country’s monarchy. It was called Revolution City but quickly became known for endemic poverty.
Saddam Hussein renamed it after himself when he seized power, but his Sunni-dominated regime otherwise neglected the predominantly Shiite area, which became a stronghold of opposition to his dictatorship.
“Because it’s poor and deprived, it has always opposed the state,” said Kareem Mtashar, who works for local authorities in Sadr City.
Today Sadr City reflects Mr. Sadr’s attempts to reinvent himself. Still a staunch critic of the U.S., Mr. Sadr has rebranded the Mahdi Army as the “Peace Companies” and indicated a willingness to support the current U.S.-backed prime minister, Haider al-Abadi, though it isn’t clear who will emerge as Iraq’s next leader.
Billboards in Sadr City display Mr. Sadr’s tweets rejecting sectarianism. Mr. Sadr has demanded that independent technocrats run government ministries, which would end the practice of divvying up posts among Iraq’s Shiite, Sunni and Kurdish groups and milking them for patronage and kickbacks.
Mr. Sadr’s followers fill the gap left by the state with the “Martyr’s Office,” which acts as a kind of shadow government in Sadr City, providing aid to the most needy, mediating disputes and helping citizens deal with government agencies through personal contacts.
His followers were on the forefront of protests over Iraqi corruption in 2016 that resulted in demonstrators storming the country’s parliament—an expression of political anger that resonated in the recent election.
Since his victory, Mr. Sadr has met with figures from across Iraq’s political spectrum but said little beyond cryptic tweets.
“God willing, we are embarking upon a new phase to build Iraq and a fatherly, democratic and technocratic government,” he said in a news conference after the election. Mr. Sadr didn’t respond to requests for an interview.
Iraq’s leaders face daunting challenges, including rebuilding areas devastated by the war against Islamic State and preventing the group’s resurgence. Iraq needs more than $80 billion to fix the damage, the World Bank says, but is struggling to attract foreign investment.
A government backed by Mr. Sadr is even less likely to follow recommendations from the International Monetary Fund to rein in public spending and close the budget deficit. Mr. Sadr’s political allies helped block an effort by Mr. Abadi to cut electricity subsidies, which cost the Iraq state around $10 billion a year.
Mr. Sadr’s followers say they remain focused on helping the country’s poor. According to Mr. Abadi’s office, the country’s poverty rate is about 30%.
“We are going into battle to regain the rights of those people,” said Alaa al-Rubaye, one of the six Sairun candidates from Sadr City who won seats in the next parliament.
—Ali Nabhan contributed to this article.