Three Essays on Institutional Change in Afghanistan

Abstract

This dissertation will explore the institutional changes in Afghanistan in two different periods. The first part of the dissertation will highlight the historical institutional setting before the invasion of the Taliban in the late 1980’s. The majority of rural areas in Afghanistan were embedded with customary law known as Pashtunwali, which consisted of self-enforcing norms coordinating credit transaction, and facilitating peace and harmony. The second part of the dissertation will discuss the effects of the post-U.S. intervention reforms in Afghanistan, focusing on explaining the disjoint between intended policy goals and the realities on the ground. Embedded and effective norms at the local level create a dysfunctional marriage between imposed formal rules and already established informal rules. The central contribution is the blending and application of insights from the New Institutional and Austrian economics literature for understanding (1) the ability of “outsiders” to generate exogenous institutional change, (2) the unintended consequences associated with such efforts, and (3) the realities of Afghanistan in the pre- and post-occupation periods. The dissertation consists of five sections outlined below as a survey of the relevant literature, three essays, and concluding remarks and implications.