By: Mohammad Bashar
I used to think Afghanistan’s problem was a lack of rules. I was wrong. It took years of living through the contradictions of daily life, and then studying institutional economics, to see the pattern clearly. On paper, Afghanistan has had everything a modern state is supposed to have — constitutions, courts, ministries, laws, elections — under one regime after another. But real life has always run on a separate track. You could be the most qualified applicant for a government job and remain unemployed unless you had a cousin in the ministry. If you had a property dispute, you did not go to a courtroom; you went to a local elder or a jirga. Institutional economics gave me language for what I had been living through: you can copy-paste formal structures onto a society, but if the informal rules are stronger, the paper version means very little.
Afghanistan has always run on two overlapping institutional systems at once: the visible state of laws and ministries, and a largely invisible second track of family obligation, patronage, tribal authority, and unwritten norms. This division brings to life Douglass North’s (1990) foundational insight that institutions are far more than physical government buildings or formal legal texts; they are the fundamental “rules of the game” that constrain and shape human behavior in a society. North distinguished between formal rules (the written laws, constitutions, and statutes) and informal constraints (codes of conduct, deeply ingrained habits, and unwritten social norms), and argued that their interaction helps determine how institutions function. In practice, what dictates economic and political outcomes is never merely what the law says on paper, but what people realistically expect will happen in daily life. If public hiring is formally declared to be merit-based, yet everyone knows that familial connections and patronage secure the position, the written law becomes entirely meaningless. Rational actors adapt swiftly to this reality: they stop investing time and money into qualifications and education, and instead heavily invest in relationships, networks, and powerful protectors.
It would be a mistake to treat these informal systems as one undifferentiated mass of “tradition.” Jirgas and shuras are dispute-resolution bodies, drawing on customary law to settle land and family disputes locally. Hawala is a financial system, moving money through trust-based networks where banks are absent or unreliable. Kinship and tribal networks are structures of social capital and obligation. Patronage is a political exchange — loyalty and votes for jobs, contracts, or protection — distinct from corruption, an individual official breaking a rule for private gain; the two often overlap, but patronage can function as an accepted system for allocating power without a single bribe changing hands. Jennifer Brick Murtazashvili (2016) and Wilde and Mielke (2013) have both shown that networks like these provided real governance, and survived decades of war, precisely because they were woven into community life in a way a distant ministry never could be.
The problem begins when a state built for impersonal, arm’s-length transactions runs on personal trust instead. During the Karzai and Ghani administrations, this manifested in concrete patterns: governorships, police chief posts, and key positions were routinely distributed to strongmen and commanders as rewards for loyalty rather than competence. Large logistics, security, and reconstruction contracts flowed directly to firms connected to sitting officials. The 2010 Kabul Bank collapse—where roughly $900 million vanished through loans to shareholders and connected insiders—remains the starkest illustration of how patronage captured even a formally regulated institution. Across dozens of reports, SIGAR documented how billions in foreign aid were absorbed into these exact networks, strengthening the state’s capacity only on paper while feeding the very system reform aimed to dismantle.
Daron Acemoglu and James Robinson (2019) call this the “cage of norms” — the way traditional rules can restrict individual liberty as effectively as a despotic state, even where no government is enforcing them. They themselves use Pashtunwali as an example: obligations of hospitality, revenge, and honor that bind a person to a code they never chose and cannot easily leave. In Afghanistan, the clearest instance of this cage is the set of restrictions on women’s mobility, education, and choice in marriage. Many of these restrictions predate Taliban rule and have long been enforced in some communities through family and social pressure; women who defied them could risk exclusion from their kinship networks, not a fine or a court summons. Inheritance follows a similar pattern: a woman’s formal right to a share of family land is routinely overridden by the expectation that she cede it to a brother, enforced by social pressure rather than statute. The cage of norms needs no police force — the community itself is the enforcement mechanism.
North, Wallis, and Weingast (2009) describe this kind of political economy as a “limited-access order”: a system in which stability depends on a narrow coalition of elites restricting who gets access to valuable rights — land, offices, contracts, resource concessions — and dividing the resulting rents among themselves rather than opening them to open competition. Afghanistan has cycled through versions of this arrangement under every recent regime. The 1964 Constitution promised a “New Democracy,” but real power stayed with a narrow circle around the royal family and a handful of tribal notables. The 2004 Islamic Republic promised elections and a market economy, but its actual spoils — governorships, ministries, mining and telecom licenses — were distributed among a coalition of former commanders and political financiers who had backed the post-Taliban settlement. This is the central paradox of Afghan state-building: from monarchy to republic to Emirate, elaborate formal systems were built top-down, while the underlying deal — who gets to extract rents in exchange for loyalty — stayed remarkably informal, and remarkably constant.
Since 2021, this tension has taken a sharper form. The Taliban discarded the 2004 Constitution for a system of religious decrees run out of Kandahar, where the movement’s central leadership holds authority that even senior Kabul-based officials cannot fully override. That divide surfaces most concretely over natural resources: some Taliban factions and provincial commanders compete for control of gold mining in Badakhshan and Takhar, emerald and lapis lazuli deposits in Panjshir, and the copper concession at Mes Aynak in Logar, treating extraction rights as spoils to divide among loyalists rather than public revenue to be centrally accounted for. Provincial jirgas that once had real discretion over land and family disputes now answer to Taliban-appointed judges, but on resources the old bargain persists in new form. Commanders who delivered fighters and funding during the war have since been rewarded with governorships, though many are unequipped to administer them, reproducing loyalty over competence under new management. The result is a system more centralized on paper than the Republic ever was, while remaining, underneath, just as dependent on personal loyalty and negotiated deference to local strongmen.
None of this means Afghanistan should try to dismantle its informal institutions, which is neither possible nor reasonable. Hawala, mediation, and kinship networks are the reasons the country survived decades of state collapse. What needs to change is the balance of power between the two systems: a jirga should mediate a dispute, but citizens must retain the right to appeal to an independent court.
Afghanistan’s institutional tragedy is not that tradition crushed modernity, but that formal and informal systems grew hopelessly tangled where personal relationships became the ultimate safety net. Because those who mastered this network have no incentive to let go, decrees cannot shatter a cage built on centuries of survival. True reform only arrives when the underlying calculus of daily life is patiently inverted—until trusting an impersonal institution is safer than relying on a patron. Afghanistan does not merely need another constitution; it needs an order where a citizen without connections can still win, and where raw talent finally outweighs waseta in public life.
References
Acemoglu, Daron, and James A. Robinson. The Narrow Corridor: States, Societies, and the Fate of Liberty. Penguin Press, 2019.
Murtazashvili, Jennifer Brick. Informal Order and the State in Afghanistan. Cambridge University Press, 2016.
North, Douglass C. Institutions, Institutional Change and Economic Performance. Cambridge University Press, 1990.
North, Douglass C., John Joseph Wallis, and Barry R. Weingast. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge University Press, 2009.
Special Inspector General for Afghanistan Reconstruction (SIGAR). Quarterly Report to the United States Congress. Arlington, VA: SIGAR, various years.
Wilde, Andreas, and Katja Mielke. “Order, Stability, and Change in Afghanistan: From Top-down to Bottom-up State-Making.” Central Asian Survey, 2013.
