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The Budget as the Linchpin of the State: Lessons from Afghanistan. Chapter 6 of Peace and the Public Purse: Economic Policies for Postwar Statebuilding

Monopoly of the legitimization of force is a key attribute of sovereignty. In post-conflict settings, where establishing the monopoly on the means of force often remains a challenge, the budget is a critical instrument of state-building. The establishment of rules that facilitate allocations, transfers, reporting and decision-making can reinforce predictability in the use of authority and generate trust between state and citizens. This chapter examines the role of the public finance system in Afghanistan in the 2001 – 2004 period. This example demonstrates that reforms can take place under difficult circumstances, but also shows the need for fundamental changes in the international aid system in order to enable sustainable development.