ABSTRACT

How states are financed, or to be more historically accurate, how they finance themselves, is the most complex of affairs. This contribution disentangles the interwoven problems of legitimacy, economic reproduction, and sustainable financing of states and their institutions, personnel, and policy. The main idea of this chapter is to sketch the functional logics of state financing and the financing of statebuilding. In order to address this puzzle, the state of Bosnia and Herzegovina will be compared with that of Afghanistan in order to demonstrate how both formal and informal structures of power are constituted and reproduced through mechanisms of official and institutionalized domination. We ask how these are financed and which opportunities local and external actors have for subverting and adopting these financial patterns. To this end, we propose a spectrum of state finances ranging from a tax-funded state to a rentier state. Examining how they are intermingled with the international political economy is vital to understand how interveners and intervened interact with, shape, and resist each other.