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An Economic Miracle in the Post-Soviet Space: How Uzbekistan Managed to Achieve What No Other Post-Soviet State Has

  • August 5, 2013
  • Vladimir Popov
Working Paper Author:
Vladimir Popov
Working Paper Publication Year:
2013
Working Paper Cover Image:

Working Paper PDF:
Popov_WorkingPaper_UzbekMiracle_Eng_August2013.pdf
Working Paper Description:

After the collapse of the USSR and the sweep of the region’s market-oriented reforms, the comparative performances of the post-Soviet successor states experienced high variation. Remarkably, Uzbekistan’s performance stands out as quite exceptional.

In retrospect, it is obvious that rapid economic liberalization did not pay off: many gradual reformers (they were called procrastinators at the time) from the former Soviet Union (FSU) performed better than the champions of liberalization—the Baltic States and Central Europe. In Belarus, Turkmenistan, and Uzbekistan, for instance, privatization was rather slow—over 50% of their GDP is still created by state enterprises, but their performance is superior to that of the more liberalized economies. Resource abundance definitely helped the resource exporters, such as Azerbaijan, Kazakhstan, Russia, and Turkmenistan, to maintain higher incomes recently, when resource prices were high, but was not a sine qua non for growth. The resource-poor Belarus and self-sufficient Uzbekistan did much better than resource-rich Russia.

As recent research shows, the crucial factor of economic performance was the ability to preserve the institutional capacity of the state. The story of transition was very much a government failure, not a market failure, story. In all former Soviet republics and in East European countries, government spending fell during transition and the provision of traditional public goods, from law and order to health care and infrastructure, worsened. This led to the increase in crime, shadow economy, income inequalities, corruption, and mortality. But in countries with the smallest decline in government spending (countries very different in other respects—Central Europe, Estonia, Belarus, Uzbekistan), these effects were less pronounced and the dynamics of output were better.

(This is a short version of the working paper in Russian titled “Экономическое чудо переходного периода. Как Узбекистану удалось то, что не удалось ни одной постсоветской экономике.”)

 

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Uncategorized

Экономическое чудо переходного период: как узбекистану удалось то, что не удалось ни одной постсоветской экономике

  • August 5, 2013
  • Vladimir Popov
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