Afghanistan Analysts Network – English

Special Reports

The Cost of Support to Afghanistan: New special report considers the reasons for inequality, poverty and a failing democracy

Kate Clark 3 min

In a new AAN special report, Kate Clark considers the apparent paradox that despite almost two decades of international support to Afghanistan, poverty for most Afghans has deepened. She also explores the gap between the promise of the 2002 Bonn Agreement and 2004 constitution, a multi-ethnic, fully representative government, a democracy with strong checks and balances, and what has actually developed – a failing democracy. She finds explanations in Afghanistan receiving colossal amounts of unearned foreign income – known by economists as ‘rent’.

A child in a rubbish dump on the outskirts of Herat. While some Afghans have become staggeringly wealthy from the rentier state, the majority have seen deepening poverty. Photo: Aref Karimi/AFP, 2014

Find the full report here:

To read the dispatch accompanying this report, click here.

Economists class Afghanistan as a ‘rentier state’, one whose national income (GDP) and government budgets are dependent on unearned, foreign income – in Afghanistan’s case, international aid and spending by foreign armies. A body of academic work called ‘rentier state theory’ predicts several consequences of this dependence:

  • Where the state has no need to tax its citizens, there will be only weak demands for representation. Democracy typically fails to take root.
  • While organised political opposition to governments is characteristically feeble, patron-client relations are strengthened. Trying to get a public sector job, a contract or to affect policies is achieved mainly by appealing to better-placed members of the same clan, tribe or ethnicity, or other people with whom one has established close ties.
  • The foreign income strengthens the domestic currency, leading to cheap imports, exports priced being out of the market and weak domestic production. With no need to foster domestic production to tax, the state is not driven to develop the institutions that support a market economy, especially rule of law and property rights.
  • A ‘rentier mentality’ develops because of the break between work and reward. Those benefitting from the rent often feel a sense of entitlement, that their connections and wealth earn them privileges, jobs and income without the need for exertion or effort.
  • Foreigners, the companies or governments which are the source of the rent, typically have more influence over the government than citizens do.

The new special report looks at how these typical characteristics of a rentier state can be found in Afghanistan. It also looks at how the conditions when rent first accrues has a long-lasting impact on the particular affects of rent.

When the United States decided to use local forces to topple the Taleban in 2001, that funding shaped the new order in the country. The rent – sudden, continuing and massive – was given to a multiplicity of mainly armed actors. Significantly as well, it came at a time when there were no institutions to hold those taking power to account. The ‘commander class’ has continued to form the bulk of the post-2001 elite, although there have also been some newcomers, especially those with access to rent through state positions, family relations with senior officials, or directly with the US military. At the same time, the Taleban have developed into an armed opposition that is as dependent on rent as the government is. The vast bulk of the population, however, have found themselves shut out from the benefits of the rentier state.

This paper also considers some particular questions thrown up by Afghanistan’s experience as a rentier state:

Why has there been so little distribution of rent in terms of ‘social goods’, such as education, healthcare or other government services, compared to the ‘classic’ rentier states?

Why have donors been so poor at insisting on accountability for money spent, despite, the US in particular having a huge influence on policy: fighting or talking with the Taleban, setting up armed forces and policies on counter-narcotics, agriculture and the economy?

Finally, the report asks what might happen when the rent dries up. Afghanistan has its own brutal lesson from history on this. In 1992 when Russia cut aid to the PDPA government, the state collapsed, triggering a new bitter round of civil war. Yet today, despite the US-Taleban agreement and the possibility of troop withdrawal and a falling off of aid and international interest in Afghanistan, politicians in Kabul have focussed on domestic politics. They have just spent long weeks negotiating a power-sharing deal which divides appointments between the two men who were claiming the presidency; in rentier state terms, the deal could be cast as sharing out rent-seeking opportunities.

Yet if Afghanistan’s international backers, especially the United States, decides to withdraw troops and international support, the political system and economy built up since 2001 would suddenly appear very fragile indeed.


The full report titled ‘The Cost of Support to Afghanistan: Considering inequality, poverty and lack of democracy through the ‘rentier state’ lens can be read here (click to open it in a separate tab).

To read the dispatch accompanying this report, click here.

Tags:

Development poverty political economy Economy Aid Government Military Governance US withdrawal development aid development aid Afghanistan trade Economics rentier 2001

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