ABSTRACT
This chapter synthesizes the findings of the study presented in this book, which amount to a sharp critique of theoretical underpinning of the dominant state-centric approach to institutional reform in countries like Afghanistan. It formulates an alternative approach to institutional reform in countries with poor infrastructure, limited market expansion opportunities, and a weak but reformist state. The approach, which I call Grounded Institution Reform, posits that the best way to create workable formal institutions is to leverage the working informal institutions. In this chapter, the Grounded Institutional Reform approach is applied to features found in Afghanistan to illustrate how it works in context. This book argues that to ensure Afghanistan’s economy can move toward reliance on formal institutions and thereby remedy the shortcomings of the informal institutions, the Afghan government needs to use working, informal institutions as building blocks for creating formal institutions that work for the Afghan context.
