Aid Paradoxes in Afghanistan: Building and Undermining the State

Author: Nematullah Bizhan

The relationship between aid and state building is highly complex and the effects of aid on weak states depend on donors’ interests, aid modalities and the recipient’s pre-existing institutional and socio-political conditions. This book argues that, in the case of Afghanistan, the country inherited conditions that were not favourable for effective state building. Although some of the problems that emerged in the post-2001 state building process were predictable, the types of interventions that occurred—including an aid architecture which largely bypassed the state, the subordination of state building to the war on terror, and the short horizon policy choices of donors and the Afghan government—reduced the effectiveness of the aid and undermined effective state building.

By examining how foreign aid affected state building in Afghanistan since the US militarily intervened in Afghanistan in late 2001 until the end of President Hamid Karzai’s first term in 2009, this book reveals the dynamic and complex relations between the Afghan government and foreign donors in their efforts to rebuild state institutions. The work explores three key areas: how donors supported government reforms to improve the taxation system, how government reorganized the state’s fiscal management system, and how aid dependency and aid distribution outside the government budget affected interactions between state and society. Given that external revenue in the form of tribute, subsidies and aid has shaped the characteristics of the state in Afghanistan since the mid-eighteenth century, this book situates state building in a historical context.

This book will be invaluable for practitioners and anyone studying political economy, state building, international development and the politics of foreign aid.

 

Book endorsements

For a state to function effectively it has to be properly funded. This is the starting point for Nematullah Bizhan’s masterly analysis of Afghanistan’s post-2001 transition, which demonstrates with great clarity how complications in this sphere can have vast ramifications for state building. This is truly a book to treasure. - William Maley, Professor of Diplomacy at Australian National University

Impressive and well written. Aid Paradoxes in Afghanistan unpacks the challenges associated with the process of state building in situations of fragility. Building on his experience in international development, public policy, and reforms in post-2001 Afghanistan, Nematullah Bizhan persuasively explains paradoxes arising from well-intentioned foreign aid. Sometimes donor policies contribute to state building while in others aid undermines these gains. This book will be of great interest to scholars and practitioners of public policy, international development and political economy. - Ngaire Woods, Professor of Global Economic Governance and Dean of Blavatnik School of Government, University of Oxford

A fascinating, insightful and balanced exploration of the post-9/11 surge in aid to Afghanistan. Nematullah Bizhan undertakes extensive historical and comparative research, and also draws on his experience as a senior Afghan government official. Contrary to much state-building rhetoric, his study shows that in fact the ability of aid to strengthen domestic institutions is severely limited, and explains why this is. - Stephen Howes, Professor of Economics and Director of Development Policy Centre at Australian National University

This book is an exceptional and unique contribution to examine the role of foreign aid on state building process in Afghanistan. The goal, process, administration and effects of the substantial aid that flowed to Afghanistan since 9/11 are examined carefully and many useful and important lessons are drawn for effective use of foreign aid in the recipient countries. - M. Ishaq Nadiri, Jay Gould Professor of Economics at New York University and Former Chief Economic Advisor to the President of Afghanistan

How can it be that, after the US appropriated more than US$1 00 billion in aid to Afghanistan, its government remains fragile and the country insecure? To be sure, twenty years of Soviet invasion, civil war, and Taliban rule had left the state in shatters. But in this pioneering study, Nematullah Bizhan moves beyond this obvious truth to explore the sensitive question: did aid promote state building or hinder it? Focusing on reform plans, the resulting structure of aid, fiscal management in Kabul, and the relation between state and society, he shows how the best intentions can go awry. Rigorously analytic and meticulous in his research, Bizhan offers an unsettling perspective on US policy in Afghanistan and, no less, deep insights on foreign aid to weak states everywhere. This brilliant study should be a “must read” everyone involved with state building worldwide, whether as donor or recipient. - S. Frederick Starr, Chairman of Central Asia-Caucasus Institute at American Foreign Policy Council and author of Lost Enlightenment: Central Asia’s Golden Age from the Arab Conquest to Tamerlane

This is an excellent work, a clearly written revelatory study on a highly complex subject-effects of aid on state building in situations of fragility that has long concerned those of us seeking answers to the question why billions of dollars of foreign aid to Afghanistan failed to build Afghan state institutions effectively. Nematullah Bizhan makes compelling arguments in support of his conclusions that the nature and modality of foreign aid, along with donor and Afghan government policies, were at the root of this failure and that foreign aid, in fact, reinforced building of a fragmented-aid based-rentier state. The book is a must-read for scholars and development practitioners specializing in state fragility and foreign aid. - Dr. Nipa Banerjee, Senior Fellow at University of Ottawa and Former Head of Canadian International Development Agency in Afghanistan

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