ABSTRACT
Another important aspect of post-2001 state building in Afghanistan included public spending and transparency. Although the Karzai government after 2001 became fiscally more open than its predecessors, the overall budget was divided between on- and off-budget items and suffered from poor transparency, and cash transfers to strongmen and the President Office remained secret. While off-budget aid constrained the government in spending aid funds on patronage, the government resorted to other means, such as offering senior positions and spending some domestic revenue on patronage. Although donors demanded increasing openness from the government, very little information about off-budget spending was made public. As such, fragmentation in fiscal management and poor transparency severely undermined the Afghans’ perception of the credibility of the Afghan state and of donors.
