Present Afghanistan is the result of more than two decades of war and a few years of relative peace brought about after the terrorist attacks of 11th of September 2001. The protracted war has resulted in more than a million casualties, an even greater number of internally and externally displaced people, the destruction of physical infrastructure, and, most importantly, the destruction of institutions of governance. Effective public administration is discussed as a prerequisite for post-conflict recovery and development. Through the evolution of investment choices the importance of capacity building for a long-term stability is shown. This paper focuses on Afghanistan after the September 11 attacks and its efforts to establish a stable government, mostly through capacity building. It gives a brief introduction to the country and describes public administration before and after the conflict. Considering the challenges of a post-conflict country, this paper emphasizes the importance of establishing an effective and stable government that can generate a path of reconstruction and long-term development. Through introduction of the national strategy for capacity building and the Public Administration Reform (PAR) programme, Afghanistan's efforts in establishing effective and stable government are shown. Priority Reform and Restructuring (PRR) is the core element of the PAR programme. Effectively, it serves as a step-by-step tool for implementing the PAR programme and it aims to reform the most critical function of government. Through the evaluation of the PRR process, the author underlines the challenges facing the implementation of the PAR programme and also draws some recommendations to overcome those challenges.