Rent-Seeking, Reform, and Interest Groups: Insights from Modern Afghanistan

• In Event: Lobbying in Comparative Perspective

Abstract

In this paper, drawing from the modern history of Afghanistan, we analyze institutional change and economic development as an endogenous process determined by the interactions of special interest groups: the dictator(s), traditional authorities (the tribal-religious-traditional conservative coalition), and emerging socio-political elites. These organized groups, each holding conflicting perspectives concerning reforms and modernization, have not only been competing for greater influence and access to resources but, more importantly, actively seeking to shape institutions and the course of societal governance and development in alignment with their distinct mental models and vested group interests. We argue that in the absence of rules of engagement to guide group competition, internal rent-seeking becomes the primary lubricant in the relations among contending special influence groups. We shed light on previously unexplored dimensions of social costs arising from rent-seeking behaviors by extending the rent-seeking literature traditionally focused on regulators and monopolists to a context characterized by a complex socio-political landscape and institutional deficiency. Our analysis reveals that the social costs stemming from rent-seeking behaviors in these contexts far surpass the combined costs proposed by Harberger and Tullock.

Author

• Mirwais Parsa, University of Pittsburgh