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The political economy of Kazakhstan: A case of good economics, bad politics?

Author

Listed:
  • Simon Commander

    (Altura Partners, London, United Kingdom
    IE Business School, Madrid, Spain
    IZA, Bonn, Germany)

  • Ruta Prieskienyte

    (Altura Partners, London, United Kingdom
    University College London, London, United Kingdom)

Abstract

Can autocracies and their associated institutions successfully implement economic policies that promote growth and investment? Can "good economics" somehow offset the effects of "bad" politics? Kazakhstan is a case where an autocratic regime has actively projected market-friendly policies and attracted significant amounts of incoming investment. These policies are to some extent reflected in the country's governance ratings, although there has been a significant amount of investment disputes that question the attachment to the rule of law. Moreover, the political regime has remained strongly personalized around the founder President, his family and associates. This is reflected in the economics­ of the autocracy whereby a large public sector and a set of privately held businesses coexist to mutual benefit. The latter have been formed around a very small number of highly connected individuals whose initial accumulation of assets allows them also to act as necessary gatekeepers for entrants. Competition as a result remains limited in both economic and political domains. Yet, uncertainties over the future leadership, along with latent rivalry over access to resources and markets, make the political equilibrium quite fragile, as the events of January 2022 have underlined. In short, "bad" politics both squeezes the space for, and distorts the benefits from, "good" economics. At the same time, the limits of "good" economics are reflected in the extraordinary concentrations of ownership, control and wealth that have occurred.

Suggested Citation

  • Simon Commander & Ruta Prieskienyte, 2022. "The political economy of Kazakhstan: A case of good economics, bad politics?," Russian Journal of Economics, ARPHA Platform, vol. 8(2), pages 122-158, July.
    • Handle: RePEc:arh:jrujec:v:8:y:2022:i:2:p:122-158
    DOI: 10.32609/j.ruje.8.90948
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    References listed on IDEAS

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    1. Commander, Simon & Poupakis, Stavros, 2020. "Political Networks across the Globe," IZA Discussion Papers 13103, Institute of Labor Economics (IZA).
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    Cited by:

    1. Nurzhan DEMEUOV & Ainur ISSAYEVA & Ardak YESDAULETOVA, 2024. "Investment Policy Of The Republic Of Kazakhstan: Main Directions And Development Trends," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 24(1), pages 19-36.

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      More about this item

      Keywords

      political networks autocracy investment;

      JEL classification:

      • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
      • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
      • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
      • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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