Bringing the State Closer to the People: Deconcentrating Planning and Budgeting in Afghanistan

The new political order arising in Afghanistan after the fall of the Taliban regime in late 2001 paved the path for reforming governance practices along with planning and budgeting. This process, however, initially focused on strengthening the central government and ensuring centralised processes for planning and public financial management. The fragmentation of state institutions and the loose institutional link between Kabul and the provinces might have further encouraged the government to excessively centralise the governance processes to extend the reach of central government and curb the power of strong local actors. Yet such an approach also had adverse implications. It has undermined the ability to effectively identify and finance local priorities, build local capacity, and increase local participation in the planning and budgeting processes. Indeed, it is a challenge to maintain the right balance between centralisation and decentralisation in Afghanistan, a situation that has also been observed in other fragile contexts. Despite major achievements in the areas of public financial management in general and budgeting in particular, in the absence of a clear subnational governance framework, a number of uncertainties and ambiguities exist in the process of identifying priorities and resource allocation. In particular, excessive centralisation, blurred institutional roles, limited capacity, and accountability deficit pose major challenges, which are exacerbated by the adverse economic impact of the triple transition (economic, political, and security), especially since 2014 with the sharp decline in foreign aid and the waning attention to reform the state. To offset the negative impacts of this transition and allocate the state’s scarce resources more effectively, the planning and budgeting system should be reformed to bring the state closer to the people by addressing the demands of local populations and their pressing needs.