C urrent counterinsurgency (COIN) doctrine emphasizes the role of benign development assistance as a key component in any campaign to enhance security in conflicted and postconflict regions.1 As a consequence, significant resources have been spent on rebuilding Afghanistan's institutions and livelihoods with the intention that such projects achieve both conventional development goals and donors' security objectives. Since 9/11, the U.S. government has appropriated nearly US$20.3 billion for governance and development in Afghanistan, on top of the security-related and human costs of the war. 2 The questions of when, where, and how development assistance builds stability are especially relevant to policymakers as the military intervention in Afghanistan enters its tenth year and international donors begin to shift their attention to other conflicted areas such as the Middle East and Africa.While counterinsurgency researchers and practitioners appear to agree on the importance of popular support in determining the outcome of insurgent conflicts, the question of how to gain it is still debated. "Hearts and minds" proponents argue that the government can win civilian support by addressing grievances, thus reducing the "demand" for rebellion. Others argue that rebels, like secular criminals, might be more sensitive to the opportunity costs and potential payoffs of rebellion. This would be especially true in weakly governed places where the state cannot successfully "buy off" potential rebels, either through legitimate work opportunities or other income transfers, nor can they effectively utilize a cooperative populace's information. So far, the empirical evidence on the relative importance of grievances ("demand") compared to employment/income-generation ("supply") as motivations for insurgent violence has been somewhat mixed. Rather than analyzing the underlying reasons for insurgency, this article explores a more fundamental question: Does spending lower violence? 3 While counterinsurgency is almost as old as war itself, there has been relatively little empirical research into whether these reconstruction efforts have generated security improvements as intended. Recent empirical evidence suggests that this strategy of combining military operations with civilian development has been somewhat successful in Iraq. 4 This article, however, looks at reconstruction and violence in Afghanistan and finds that those efforts have ambiguous effects on conflict. For each of three reconstruction programs (the Afghan National Solidarity Program, USAID's Local Governance and Community Development Program, and the U.S. military's Commander's Emergency Response Program), project spending does not statistically reduce, nor increase, the level of rebel violence.However, the difference in results between the U.S. military's CERP and the two other programs suggests that aid conditionality is an essential, but currently underemphasized, prerequisite for stability-enhancing development. The theoretical model predicts stark differences in...