The paradox of aid: lessons from Afghanistan

ODI live events

Supporting so called ‘fragile states’ to build capacity and exit fragility is one of the most pressing challenges for the world today. Soon most of the world’s poorest people will be left behind in countries affected by conflict. In response, the share of aid to fragile states is growing. But is more aid the right answer? This event explores the case of Afghanistan. While western economies built states and the social contract around tax, modern Afghanistan has been built around aid. Although intended to support effective state-building, the way aid has been delivered has arguably distorted the state and stunted the longer-term development of a social contract: a ‘paradoxical outcome’. This event, which forms part of a series of discussions on ‘new directions in public finance’, explores how external actors can effectively support state-building in fragile states. Drawing on Dr Nematullah Bizhan’s personal experience and extensive research, it discusses how future progress in conflict or post-conflict states requires a fundamental re-think of the way aid can support rather than hinder state building, and considers the crucial role of revenue and taxation.