Editor in Chief: Moh. Reza Huwaida Thursday, November 15th, 2018

Governance and Poverty Reduction in Afghanistan

The main argument on poverty in development economics center’s basically on the interface between economic growth and poverty. Whereas on the one hand some contend that unless an economy is able to produce steady economic growth, poverty reduction cannot be possible. Economic growth typically has a spill-over effect on poverty. And there are distributional consequences that result from economic growth through a competitive market structure. A good example for this argument are countries like South Korea, Singapore, Taiwan and Hong Kong, which are countries that got on the high growth path and could substantially lessen poverty. Defiantly, some others do contend that economic growth is necessary but not enough to engender poverty reduction. Certainly, the process of engineering economic growth usually worsens inequality and poverty in the society. If no mindful effort is made to mitigate the side effects of economic growth, it may deepen poverty, increase social resentment and invariably provide a wave of popular discontent that may negatively impact on the growth process itself. Some level of redistribution and redressing economic inequalities in society is necessary to achieving stable economic growth.
Development economics rarely placed any emphasis on political issues in relation to poverty. Poverty was considered a strictly economic domain.
However, it is only the New Institutional Economics that talks about the role of institutions in generating economic growth and alleviating poverty. Effective institutions with clear rules of economic engagement reduce transaction costs, correct market imperfections and make non-market allocation of resources in some instances. The spirit of institutions in this case is simply to support the economy; it is not to give superiority to politics, democracy or governance in poverty issues. But, in recent times, new thoughts have begun to emerge on the notion of poverty, its causes and the strategy to combat it.
Governance has become a key issue in the discourse on poverty. Poverty is a policy issue that exists in the political domain. Poverty, inequality and governance are now seen to be inseparably related because without good governance, bad policy choices will be made, the people would have neither voice nor power, and the economy may likely deteriorate. Likewise, when poverty and inequality continues in a society it weakens the political process and promotes deficient governance. Governance provides the institutional, legal and political framework not only for the design of poverty reduction policies but also for the improvement of the capacity of the poor to deal positively with and improve their material conditions. Governance ensures the participation of the poor in decisions that affects them and empowers them to get their views on the policy agenda. Giving voice to the people in the policy process especially on poverty issues is a necessary and progressive step in an attempt to promote and sustain growth, development and socio-economic transformation in Afghanistan.
Governance and democracy are about making choices, which the people determine for themselves and choose to live by. The choices offered by Poverty Reduction Strategies are more apparent than real, and more hollow than substantive. Poverty Reduction Strategy is a repackaged form of structural adjustment with slight modifications on the social content and emphasis on the issues of national ownership and consultation, which are some of the lessons learned from the failure of past strategies.
For economic growth to be engineered as a basis of poverty reduction in Afghanistan, the country should be given the right to make choices on the economic policy and agenda it wishes to pursue; not an uncritical imposition of the market ideology and have the total freedom to determine their social policy including poverty reduction strategy. What Afghanistan’s development partners should encourage is a commonly shared vision of economic and social development by the people, which they can be committed to, rather than a disguised external policy embellished with political clichés of participation and spurious national ownership. Poverty reduction in Afghanistan is not only entwined with dimensions of power at the national level; there is also an international dimension to it.