Constructing Market-Based Economies in Central Asia: A Natural Experiment?1

By Pomfret, Richard | The European Journal of Comparative Economics, July 1, 2010 | Go to article overview

Constructing Market-Based Economies in Central Asia: A Natural Experiment?1


Pomfret, Richard, The European Journal of Comparative Economics


Abstract

This paper reviews the experience of the five Central Asian countries in the two decades since independence. In the 1990s the five countries looked like a natural experiment. They had similar initial conditions, but different transition strategies. Today that does not appear to have been a useful research agenda, which raises some broader questions for comparative economic studies.

JEL codes: P20 O53

Key words: transition - Central Asia

1. Introduction

Following the collapse of central planning in Eastern Europe and the Soviet Union, an active and urgent debate ensued on the merits of alternative strategies for the transition to a market-based economy. In econometric studies of economic performance (typically measured by change in GDP) the strongest results were for variables that picked up the difference between Eastern Europe and the former Soviet Union, whether measured as distance from Düsseldorf or years under Communism or levels of human capital, and for some obvious negative correlations (e.g. between growth and war or hyperinflation). The extensive literature produced little or no consensus on the relative merits of gradual versus rapid transition or on the optimum sequencing of reform, because beyond the similarities of a Communist regime and central planning the thirty-something transition economies were a diverse group.

A better basis for comparative analysis may be to take a smaller less heterogeneous group of economies. In this paper I ask whether the five Soviet Central Asian republics provide such a natural experiment. Apart from their similarity of geography and culture, the five Central Asian successor states were, together with Azerbaijan, the poorest Soviet republics in 1991. Their role in the Soviet division of labour was supplying a small range of primary products (cotton, oil and gas, and minerals). The Central Asian republics had no prior history as independent nation states. Their territory had been incorporated into the Russian Empire in the nineteenth century, so that they had roughly similar lengths of experience in the Tsarist Empire as well as the same Soviet history. The republics' borders were more or less arbitrary creations of Stalin; they could conceivably have been amalgamated as the Turkestan Soviet Republic, but instead they gained independence in December 1991 as five separate states. In four of the five republics, First Secretaries appointed by Mikhail Gorbachev became national presidents and quickly established super-presidential political regimes, with power heavily concentrated in the executive branch and with weak parliaments and legal institutions. The exception was Tajikistan which experienced a bitter civil war until 1997, but since then the president has established a superpresidential system.4

When the five Central Asian countries became independent in December 1991, the political priority was nation-building. At the same time they faced three major economic shocks: the end of central planning, hyperinflation, and the collapse of demand and supply chains. Although the central planning system had been abandoned in the final years of the Soviet Union, reform had hardly begun in Central Asia, but when Russia introduced a big bang liberalization of prices in January 1992 the Central Asian countries, which still shared a common currency with Russia, were forced to follow. In the transition to a market economy, government spending exceeded revenues and inflation accelerated, turning to hyperinflation in 1992-3, which was exacerbated by the common currency zone. Finally, when transport networks were nationalized and borders were erected, the Central Asian economies were vulnerable to the rapid collapse of Soviet-era demand and supply links.

All five countries suffered serious disruption from the dissolution of the USSR. Falling output and rising prices became much worse after the formal dissolution of the USSR removed residual central control over the Soviet economic space. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Constructing Market-Based Economies in Central Asia: A Natural Experiment?1
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.