Commitment devices, opportunity windows, and institution building in Central Asia

Year

Source: Heritage Foundation (2008). Note: No data available for Central Asian countries prior to 1997.

Fig. 1: Institutional Quality 1995 - 2006

close to CEEC levels, even though CEEC were starting off at a much higher level. Particularly,
the Kyrgyz Republic, Taijikistan, and Kazakhstan show a significant upward trend after 2001
and became the most dynamic reformers in the group, while Turkmenistan and, to some extend,
Uzbekistan are still lagging behind. Leaving aside Turkmenistan, all Central Asian countries
show some co-movements with Russia and their surrounding countries in Central and Eastern
Europe. This may suggest that factors that are common to either Central Asia and Russia or
Central Asia and CEEC have driven the reform process.

Although, most Central Asian countries show signs of institutional changes in recent years
according to Figure 1, it is important to understand factors that cause persistence of lumpy
institutions in order to ensure that the reform process will be continued and not be reversed.

Several authors have discussed factors behind the persistence of institutional arrangements
(cf. International Monetary Fund (IMF, 2005) for an overview).

The most prominent argument why bad policies persist is that the polity has control over
economic rents from natural resources such as crude oil (cf. Sachs and Warner, 2001; Ross,
2001; Sala-i-Martin and Subramanian, 2003; Ramsay, 2006). Access to these rents pose a
disincentive for political and economic elites to reform institutions, as (tax) earnings from other
economic sectors, which would need sound institutional frameworks for their development, pale
in insignificance (Rajan and Zingales, 2006; Congdon Fors and Olsson, 2007). Moreover, poor

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