Columbia International Affairs Online: Policy Briefs

CIAO DATE: 09/2013

Changing Financial Flows During Afghanistan's Transition: The Political Economy Fallout

William Byrd

September 2013

United States Institute of Peace

Abstract

Massive amounts of money flowing into Afghanistan since 2001 (foreign military spending, aid, domestic revenues, opium profits, land takeovers and development, informal mineral exploitation, theft of funds such as at Kabul Bank) have had profound political economy impacts, not least by further entrenching factionalized politics and fragmented patronage networks. The ongoing transition involving the drawdown of international troops and Afghan takeover of security responsibilities will be accompanied by drastic declines in international military expenditures and aid.