Manu Manthri

Policy and Research Papers

Security Sector Financing and Fiscal Sustainability in Afghanistan

Afghanistan is emerging from decades of strife, and the new Government faces several challenges. Arguably the most daunting of these is to make Afghanistan secure, and establish the rule of law. Approximately $9 billion of foreign assistance has been spent on the security sector from 2003 to 2007, underscoring the important role the security sector plays in the wider reconstruction agenda. From 2007–10 a major scale-up to over $14 billion is planned, to be funded largely from external assistance. This resource expansion should be accompanied by heightened scrutiny of how foreign assistance is spent and whether it is delivering the desired outcomes of peace and a stronger, more accountable Afghan state. One important question to ask is whether the current financing model employed is the correct one, and how it affects the incentives around the reform process.

This paper takes an aid effectiveness approach to judge whether the financing model is appropriate for Afghanistan and it finds that the current financing model falls short of good aid effectiveness practice.