Efforts to curb corruption in Afghanistan are failing, says a new USAID report. Based on dozens of interviews and a comprehensive review of existing studies and polls, the report describes the sources of corruption, which include the huge volume and variety of international aid pouring into Afghanistan, 30 years of conflict that have weakened state institutions and disrupted social relationships, and Afghanistan's role in the illegal opium trade. Afghanistan is now the fifth most corrupt country in the world (following a rapid ascent from number 42 in 2005) according to Transparency International figures.
This needs to be evaluated in light of Violence and Social Orders by North, Wallis, and Weingast. A society with relatively little corruption is what NWW call an open-access order, which is a highly advanced state that only emerges under the right conditions. In an open-access order, competition is very free and open to all in both the economic and political spheres. Moreover, there is a great deal of separation between economics and politics, which is what we mean by low corruption.
In the absence of all of the conditions for an open-access order, peace is achieved through a limited-access order, or a natural state. Groups with the potential for violence form a stable coalition based on limiting the access to economic and political power. Political and economic power are combined, which we call corruption. However, if you were to impose a separation of political and economic power, you would undermine the value of staying in the coalition, leading to instability and violence.
I would say that there is no chance that the United States will succeed in its objective of establishing an open-access order in Iraq. The best we can hope to do is restore Iraq to a natural state, meaning a limited-access order where rights and power are exclusive to certain elites, who will be subject neither to economic nor political competition as we know it...
If we want to set up a limited-access order, then we have to determine which factions we want to have in the governing coalition, and we must give each of them something of value in return for maintaining peace. To put it crudely (so to speak), one could imagine giving each major party in a coalition government control over a particular set of oil wells.
Afghanistan today is probably at least as far away from being an open-access order as Iraq was early in 2007. It would be unrealistic to apply the standards of an open-access order to Afghanistan and to treat corruption as a problem. The challenge in Afghanistan is to bring down the level of violence, and to do that it will be necessary to establish a limited-access order, in which corruption is part of the solution.