Afghanistan, governance capacity and foreign assistance pathologies

Why should we care about governance capacity building, and why do our current aid institutions fail so miserably?

Lockhart before the SFRC, 17 Sept 2009.

Back in 2002, during the preparation of Afghanistan’s first post-Bonn budget, Afghanistan required a budget of $500m for the year to be able to pay its 240,000 civil servants (including doctors, teachers, and engineers) their basic salaries of $50 per month and to cover essential running costs. As the Treasury was empty, assistance was required. Unfortunately, donors initially committed only $20 million to the 2002 Afghan budget, meaning that Afghanistan’s leaders could never in the 2002-4 period meet the basic costs of sustaining services. At the same time, $1.7 billion was committed to an aid system to build parallel organizations, which ended up employing most of the same doctors and teachers as drivers, assistants and translators to operate small projects at significant multiples of their former salaries. While some additional funds were later committed to the

World Bank-run Afghan Reconstruction Trust Fund, this was never enough to sustain basic governance, and the civil service atrophied. Rather than support the essential nation-wide services and programs within a framework of rule of law and policy, donors launched thousands of small, badly-coordinated projects. Billions of dollars were spent through the aid complex, resulting in little tangible change for most Afghan citizens. Their perception of aid projects was most vividly captured for me in a story told to me by villagers in a remote district of Bamiyan, who described their multi-million dollar project going up in smoke.

The prescriptions of the “aid complex” not only by-passed, but actively undermined Afghan capability: for example, it was aid donors forbade any investment in the Afghan budget for education or training over the age of 11, citing the overriding imperative of investing in primary education. Similarly, a $60 million provincial and district governance program designed to restore policing and justice services was turned down in 2002 for funding on the basis that governance was not “poverty-reducing”.