Association for Public Policy Analysis & Management

The literature on policy feedback theory is widely used to explain how policies create politics, and how such policies create conditions for their own stability over time. Although much of this literature has produced studies of developed countries with consolidated democracies, this paper seeks to apply policy feedback theory in a developing country, specifically Afghanistan. Using the lock-in effect mechanism of policy feedback theory, this paper explores how a set of centralized fiscal policies, once enacted in Afghanistan’s post-2001 era, remained stable despite numerous efforts towards fiscal decentralization. I show that the centralized fiscal policies, once enacted, created specific political, economic and social networks, both within and around government, centered on access to the political and economic resources of the state. Simultaneously, this paper argues that centralized policymaking processes, dominated by the networks and derived from a centralized governance system, have further reinforced the stability of centralized fiscal policies, notwithstanding decentralized reform content. To support these arguments, this paper relies on two sources of data: first, content analysis of the constitution, analysis of fiscal policies (including taxation, planning, budget allocation and expenditure), and analysis of annual budgets highlighting the centralization of fiscal authorities in allocation and expenditure of public funds; and second, over 20 interviews with government officials, members of parliament, party leaders, civil society, and local administrations from four provinces.