Emerging from more than two decades of conflict, Afghanistan faces a complex, interrelated set of political, administrative, economic, and social challenges. In 2002, the Afghan Interim Authority took over a public administration that was highly centralized in terms of its structure, but which was denuded of infrastructure, human capacity, and financial resources, and had non-existent or very weak ties with its provinces.
The administrative structures of the state are basically sound and understood—though they are not always adhered to. The government administration is far from effective, and suffers from a number of systemic problems including fragmented administrative structures, with many overlapping and unnecessary functions; and difficulty in attracting and retaining skilled professionals with management and administrative experience. Pay structures are currently being reviewed so they can attract, retain, and motivate skilled civil servants and to ensure they are fiscally sustainable. Merit-based recruitment procedures are still new and are as yet unable to fully address issues such as patronage and kinship, influencing appointments; and mechanisms for performance management are inadequate. Despite some priority restructuring and reforms, administrative systems are slow and cumbersome, with limited delegation of authority to lower ranks or provincial departments.
Afghanistan is a unitary state with a highly centralized government structure. However, central control is weak, although there have been slight improvements since 2002. Weak administration and lack of control in some provinces have made tax policy and administration difficult. Currently domestic revenues cover less than half of all expenditures. However, increasing domestic revenue will be necessary for Afghanistan to have a fiscally sustainable budget. Assessing and collecting taxes throughout the country will require strong administrative capacity. It will mean building enforcement capacity, information systems, and skills.
The existence of a major drug trade, unsecured borders, and informal markets, also create conditions conducive for administrative corruption. To combat corruption, President Hamid Karzai established an anti- Independent corruption department in 2004.
The almost total absence of well-trained and accountable judiciary has led to a culture of security violations and impunity. Criminal acts do not reach the courts, and crimes go unpunished.
Afghanistan faces major challenges in public financial management. The Government is taking steps to prioritize expenditures to support national development objectives, and to make the national budget the central instrument of policy and reform.
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