Understanding Afghanistan’s Recent Economic Development: A Comparative Analysis with Pakistan

Type Working Paper
Title Understanding Afghanistan’s Recent Economic Development: A Comparative Analysis with Pakistan
Author(s)
URL https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2087792
Abstract
It is often assumed that Afghanistan’s economic problems stemmed from the internal
warfare that began in 1978 and continues to the present. But are the causes of its economic
problems much deeper? I consider this question by comparing it from 1961 to 2006 with Pakistan
(a neighboring country with a similarly low level of development in the early 1960s) in three
agricultural statistics: agricultural output growth, labor productivity growth in agriculture and
total factor productivity (TFP) growth in agriculture. Because it constitutes such a large portion of
GDP, opium data is included for Afghanistan. I find for all three measurements Afghanistan fell
behind Pakistan well before 1978 providing evidence that more than just conflict explains
Afghanistan’s lack of development. The fact that the exact timing Afghanistan fell behind Pakistan
was when Green Revolution technology entered the region and given Afghanistan adopted little
such technology relative to Pakistan, I find evidence the failure to adopt such technology was at
least partly responsible. This paper is the first to calculate the agricultural labor productivity and
total factor productivity in agriculture for Afghanistan.

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