| Summary/Abstract |
The literature of fiscal federalism suggests two approaches to explaining the allocation of intergovernmental transfers. First, a normative approach that considers governments as benevolent social planners pursuing normative criteria of efficiency and equity; and second, a public choice approach assuming governments as self-maximizing actors who use intergovernmental transfers to purchase political capital, enhancing their chances of re-election. This paper seeks to test the hypotheses of these two approaches to explain the allocation of discretionary development budget among Afghan provinces during three fiscal years of 2016–17, 2017–18 and 2018–19. Findings indicate Afghanistan’s central government’s approach does not focus to achieve normative criteria of improved participation, predictability, transparency, and equity. Instead, Its central government considers certain political criteria such as political affiliation – ethnic affiliation and alignment with central government policies – political importance, and strength and weakness of local actors. This paper relies on both quantitative and qualitative data to support its arguments.
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