AFGHANISTAN: THE ECONOMIC IMPACT OF ARMED CONFLICT

Abstract

This study examines the economic impact of armed conflict in Afghanistan. During the armed conflict between 1978 and 2021, the country received $88 billion in official development assistance (ODA) and over $136 billion in war-induced USAID funding. We found that the one-year Afghan armed conflict, with an average of 17,661 battle-related deaths, increases the GDP per capita by at least 1.9%. Comparatively, a one-year US-led war relative to a USSR-led war increases the GDP per capita by at least 5.7%; in contrast, a one-year civil war reduces it by 4.1%. In addition, our cost estimation suggests that between 2002 and 2021, at least $40.9 ± 5% billion (45.9%) of the Afghan state budget is spent on war-related and war-affected institutions. This is equal to 1,062% of Afghanistan’s total GDP in 2002 and 280% in 2021. Moreover, this study will be helpful in understanding the implications of the Sustainable Development Goals and achieving specific targets such as Goal 8 (economic growth) and Goal 16 (peace and inclusive societies) in Afghanistan. Keywords. Economic impact, GDP, armed conflict, USSR-led War, US-led War, civil war, Afghanistan.