Long-term war in Afghanistan: Its impacts on the economy, environment, and human resource development

Long-term war in Afghanistan: Its impacts on the economy, environment, and human resource development

War is a devastating phenomenon that destroys the economic, social, and technological infrastructure of a country, causing civilians to suffer from lost social and economic development opportunities, lost human capital development opportunities, forced migration, hunger, high mortality rates, and massive destruction. Moreover, war causes significant governance vulnerabilities and imposes substantial costs for the reconstruction and rehabilitation of damaged infrastructure. The principal objective of the present thesis is to examine the symmetric and asymmetric effects of long-term war on three key socioeconomic indicators, the economy, environment, and human resource development in the context of Afghanistan. It also aims to produce statistical evidence on the nature, size, and magnitude of the effects of long-term war on the predictors in order to generate specific policy recommendations to national policymakers and the international community who are engaged in the process of nation-building, peace-building, and market-building in Afghanistan.

To accomplish the objectives, five research articles focusing on the key themes of the thesis were produced to investigate the effects of war on economic growth, unemployment rate, environmental quality, human resource development, and public healthcare services over the period from 2002 to 2020. This thesis employed time-series datasets collected from reliable sources, such as the WDI (World Development Indicators), ADB (Asian Development Bank), IMF (International Monetary Fund), and the United States Defense Budget. To test the newly developed hypotheses (H1–H15) relevant to the research questions informed by the research objectives, complex econometric methods such as the NARDL (non-linear autoregressive distributed lags), MVAR (modified vector autoregressive), and a series of multivariate regression models that have been augmented with sets of well-known predictors were used. In addition to testing the effects, both symmetric and asymmetric causality techniques were also used to determine the link and the direction of the causality from war to the variables of interest and vice versa.

The findings of the thesis are critical and produce important insights into the effects of war on the variables of interest. On the economic front, the results confirm a long-run asymmetric relationship between war and economic growth. It is also indicated that a positive asymmetric shock from war reduces economic growth, while a negative asymmetric shock from war increases growth in the short and long runs.

Moreover, the findings highlight the non-monotonic effects of war on economic growth, both in size and magnitude. Statistical evidence concludes that there is a significant bidirectional causality between economic growth and the war. On the unemployment front, the findings reveal that the positive asymmetric shocks from war decrease the unemployment rate, while their negative asymmetric shocks increase it in the short and long runs. It also demonstrates that enhancing the outreach of financial services plays an important intermediating role in reducing the unemployment rate during wartime in Afghanistan. The findings show that an asymmetric causality runs from both the positive and negative components of war to the unemployment rate, confirming a bidirectional nexus among them. On the environment front, the findings support a long-run relationship between war and environmental degradation. It also reveals bidirectional causal links between environmental degradation and war, while confirming multidimensionality and interdependencies among predictors. Moreover, the findings confirm the existence of an inverted U-shaped relationship, supporting the validity of the EKC hypothesis in Afghanistan. On the human resource front, the findings support a long-run asymmetric relationship between war and human resource development, while the magnitude of the relationship has been confirmed to be asymmetrically negative. It further reveals that the school enrolment rate—a proxy for human resource development—is highly sensitive to and swiftly reacts against the intensity of war. Furthermore, the findings show that both the positive and negative aspects of war have a significant impact on the school enrolment rate. Finally, on the public healthcare front, aging results support a significant long-run relationship between war and public health, showing that war positively impacts health expenditures, whereas child mortality rate and crude death rate have negative impacts. The findings also indicate a statistically significant bidirectional causal nexus between health expenditure and war, while supporting the existence of strong and significant interconnectivity and multidimensionality between war and health expenditure, with a significantly strong feedback response from the control variables.

Considering the statistical evidence, the results of this thesis conclude that the long-term war in Afghanistan had significantly devastating effects on socioeconomic indicators, most specifically on the economy, environment, and human resource development during the period of the study. It concludes that war significantly suppresses economic growth, imposing serious consequences on the well-being of the nation through increased unemployment rates, diminished human resource development processes, and degraded environmental quality, all of which impact both the nation’s lives and its development. The critical findings of the thesis shed light on important policy implications and offer a set of policy recommendations to policymakers.

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