Trading Political Loyalty: The Political Economy of Aid in Afghanistan

Abstract

This article examines the political economy of aid in Afghanistan, analysing the relationship between foreign aid and political loyalty under the presidencies of Hamid Karzai and Ashraf Ghani, alongside the Taliban insurgency (2001–2021). Drawing on Alex de Waal's political marketplace framework and first-hand field data, it explores how aid availability shapes the tradable and nontradable loyalties between the state and local elites, and between the state and rebel groups, and what the implications of these dynamics are for conflict and stability. I argue that abundant aid flows enable rulers to purchase local elites' loyalty, thereby sustaining stability, whereas declining aid fuels conflict. Loyalty, however, is not uniformly tradable across all actors. While local elites' loyalty depended on aid-based patronage, the Taliban's access to alternative buyers of loyalty, their orientation as total spoilers and shifts in the position of international patron rendered their loyalty nontradable. By theorising why loyalty becomes tradable and nontradable, this article advances the political marketplace framework and offers new insights into the literature.