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Centre-Periphery Relations in Kazakhstan and Managing the Oil-Boom

Written by Ben on Wednesday, 29 November 2006
Business and Economics, Kazakhstan
4 Comments

I am looking into Kazakhstan’s centre-periphery relations for my Master’s thesis, and I am currently sighting the available literature. Essentially, the question is: How are centre-periphery relations shaping the implementation of development strategies taking into account both economic decentralisation and growing oil windfalls. A couple of interesting tidbits (comments on any of these aspects most welcome):

Over the last years, Kazakhstan has seen a gradual economic decentralisation coming from below. Although a de jure unitary state, the regions have been able to act more independently and the central state reacts by either ‘legitimising’ what is already occuring in practice or ignores what’s going on in order to avoid the appearance of ‘weakness’.

This economic decentralisation can be found in the fiscal, administrative and regulatory hemispheres. With regards to fiscal decentralisation, it is important to see in how far the oblasts’ administrations have a say over how much of the collected tax payments remain in their budgets and do not get remitted to Astana. Jones Loung (2002) shows that for five regions, higher tax shares than officially designated remain in the local budgets.

In terms of administrative decentralisation it is interesting to see that the oblasts are officially charged with the provision of social services. Cummings (2000) demonstrates that with the 1998 amendments to the constitution, the centre got legally absolved of the responsibility of welfare provision, which means that the provincial administrations are responsible for education, local law enforcement, medical assistance, social support, etc.

Regulatory decentralisation would pertain to the degree with which local authorities enforce national legislation and regulations. Jones Loung finds that local administrations would consistenly prioritise local over national regulations. Also corruption plays a big role here, i.e. that national regulations can be ‘overlooked’ in return for the payment of a bribe.

All in all, there seem to be quite a few potential divergences between central and peripheral administrative structures. While the president is still in charge of nominating regional akims, there is more a more delicate degree of power-brokering unfolding under closer scrutiny. My focus with this dissertation will lie in the implications the oil-boom of the last five years has had on these centre-periphery relations and in how far the centre’s development strategies can be successfully implemented at this stage of de facto decentralisation.

Taking into account that the two studies cited here are largely drawn upon research that took place in 1999/2000, I am interested to see if new legislation has legally changed the division of power between centre and periphery (if anyone out there knows of some good publications post 2003 on this topic, I’d be happy for some hints) since then. Again, any input most appreciated.

Cummings, S.: ‘Kazakhstan: ‘Centre-Periphery Relations’, Brookings Institution and Royal Institute, 2000
Jones, P.L.: ‘Economic Decentralisation in Kazakhstan: Causes and Consequences’, in Institutional change and political continuity in post-Soviet Central Asia : power, perceptions, and pacts, Cambridge University Press, Cambridge, 2002

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4 Comments »

  • Nathan says:

    Hmmm… In some ways, that’s related to what I’m doing. If you come across anything good that draws attention to clan competition or region-based networks (which I think are far more relevant to Kazakhstan than are clans) competing with the center, let me know. I’ll do the same if I see anything you’re looking for.

    Reply

  • Ben says:

    Nathan,

    thanks for that. From what I’ve been reading the regional networks thesis makes more sense as well. A good part of Cummings 2000 is about that (I am sure you’ve checked her stuff out already). Her 2005 monograph “Kazakhstan: Power and the Elite” is a bit more in-depth. Other than that, I’m sure I’ll come across more related readings and will certainly send them your way.

    Reply

  • KZBlog says:

    I’m not a scholar in this area but I do note that for all you bring up (definitely buying Cummings), there is still a cult of the central gov’t, officially or unofficially realized. So when the Central government devises a plan (Kazakhstan 2030 or the Industrial-Innovation Strategy for example) all regions are expected to write reports (passports) on how they will implement the plan. In fact these passports are all almost identical and reiterate what the central plan says. In practice what happens on the ground may be different but that seems to be more an example of loopholes, lack of monitoring, etc than a deliberate plan of decentralization. Now loopholes and lack of monitoring/enforcement are so widespread as to be a real force. But legislatively–while decentralization has occured–the regions report to the center, keep taxes only because the central government allows them to. In fact one proposal for the new SBKs (still under disucussion) would allow the central gov’t to collect fines for environmental ‘crimes’ and distribute them to the SBKs.

    Reply

  • Andrea says:

    Hi Ben,
    I am also interested in this topic. I am interested in whether or not decentralization increases the probability that a government will “loose control” of expenditures during oil booms. Since Kazakhstan has been undergoing a process of decentralization while oil revenue has been on the rise, this case may help illustrate the dynamics between center and periphery. I would be very interested in what you find, as welll as any sources you come acroos. I have read the two that you cite…but please keep me posted.

    Reply

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