Examination of Afghanistan's Development Traps

Abstract

We examine the factors behind Afghanistan's persistent underdevelopment. Drawing on various theories of development traps operating at the demographic, economic and institutional levels, we seek to assess whether and to what extent their functioning affects Afghanistan's development. To capture the functioning of development traps empirically, we use several empirical indicators, and we employ non-linear smooth transition models to evaluate the link between empirical indicators and economic development. We show that Afghanistan is caught in multiple development traps with entwined functioning, creating additional positive feedback loops that impede both the endogenous development of productive capacities and the broader social structural changes.