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The Economic Roots of the Afghan Debacle

Afghanistan experienced rapid economic growth in the decade following the US invasion and the ouster of the Taliban. But the subsequent stagnation of living standards – rooted in the failure to build a self-sustaining domestic economy – made unrest all but inevitable.

BRUSSELS – Nation-building has manifestly failed in Afghanistan. MIT’s Daron Acemoglu has elucidated an important reason why: the West took a top-down approach to establishing state institutions, even though Afghanistan is a “deeply heterogeneous society organized around local customs and norms.” But economic factors also played a key role.

Afghanistan is desperately poor, with a per capita income of about $500 (in current dollars) – one-hundredth that of the United States. The real problem, however, is not Afghanistan’s income level, but rather its rate of change. The literature on revolutions and civil unrest suggests that high growth stabilizes a country’s politics, irrespective of whether the country is rich or poor (or whether it is democratic).

In other words, rapid growth helps plaster over conflicts. But it also creates expectations of continuing improvements in living conditions. If these expectations are not fulfilled – say, because growth slows or reverses – unrest becomes likely.