Minimalist economic management, deferred revenue regime and aid dependency: Explaining contradictory post‐war statebuilding aims

Abstract

The paper analyses a contradiction in the liberal approach to post‐war statebuilding. The form of the state is seen to aim for the establishment of a centralised maximalist administration when the state's de jure economic policy makes its revenue dependant on market‐generated private sector taxes that are either inadequate or its institutions are part of the reconstruction process. This conflation de facto leads to dependency on official development assistance (ODA), mainly administered through exogenous‐to‐state agencies that undermine the nascent state's bureaucratic development. The paper introduces the concept of deferred revenue regime and argues that dependency on ODA is one empirical symptom of the contradiction in the liberal approach to statebuilding. Using a high‐profile recent example in an instrumental case study, Afghanistan, from 2002 to 2021, the paper develops a diachronic sequencing of significant policy decisions to suggest temporal causality between economic management and ODA dependency, relying on primary data and stylised statistics. The findings contribute to post‐war statebuilding, institutionalism and the political economy of aid.