The Causal Impact of the Taliban’s Insurgency and Return to Power on Economic Well-being in Afghanistan

Abstract

This study examines the causal impact of insurgency and government collapse on economic well-being in Afghanistan. Utilizing Bayesian structural time-series causal impact models, the research investigates the effects of the long-standing Taliban insurgency, the resulting insecurity, and the uncertainty associated with the US policy shift and reduced international aid on Afghanistan's economic well-being. Additionally, the study conducts a counterfactual analysis to assess the hypothetical impact if the Taliban insurgency or restoration had not occurred. The findings demonstrate that international aid has not contributed to sustainable economic well-being, and that the policy shift of the US from counter-terrorism toward engaging in negotiations with the Taliban, has resulted in a significant economic decline. This research offers valuable insights into the intricate relationship between aid dependency, insurgency, political uncertainty, and economic well-being in fragile and aid-dependent states like Afghanistan.

Keywords:

• aid dependency
• Afghanistan
• economic well-being
• income per capita
• insecurity
• insurgency
• Taliban

Notes

1 To check the validity of our model, we have performed additional Analyses. As reported in the appendix, all models are statistically significant, confirming our findings and the validity of the results.

Additional information

Notes on contributors

Musa Shafiq

Musa Shafiq received his Ph.D. in Economics from Strasbourg University, France. He is a Professor of Economics at Kabul University. His research focus is institutional and development economics. He has published several academic articles in international peer-reviewed journals. In addition, he has worked with different national and international organizations.

Mohammad Qasim Wafayezada

Mohammad Qasim Wafayezada is a Professor of Peace and Conflict Studies at Kanazawa University, Japan. As a practitioner, he has served in various positions, including Minister of Culture and Information in the former Afghan government. His research interests are in ethnic politics, post-conflict peacebuilding, and statebuilding. He is the author of Ethnic Politics and Peacebuilding in Afghanistan (2013).