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

Year

Source: International Energy Agency (2008), IMF (2008).

Fig. 2: Oil related GDP 1995 - 2006

property rights protection can be used to block the introduction of new technologies which may
reduce the elites’ future political and economic power (Rajan and Zingales, 2006; Acemoglu and
Robinson, 2006).

Figure 2 shows the share of oil related GDP as a share of total GDP as a measure of resource
dependence in Central Asia. Oil related GDPs in Central Asia are compared to the one in Russia
and an unweighted MENA average. Looking at Figure 2 shows that Kazakhstan, the Kyrgyz
Republic, alongside with Russia, have the highest share of oil related GDP in the graph. All
three countries are well above the average MENA country, whereas Uzbekistan is roughly at
the same level and Turkmenistan and Tajikistan are below MENA average. Comparing this to
Figure 1 suggests that there seems to be no clear relationship between resource dependence and
institutions in Central Asia. Kazakhstan and the Kyrgyz Republic are the countries with the
highest fraction of oil related GDP and the most sound institutions as well. At the same time,
the countries with the poorest institutions in the Central Asian group are also the ones with the
lowest degree of resource dependence according to our measure.

Another argument is that being a former colony or having a legal system that roots in
European legal tradition has a positive long-term effect on institutional arrangements (Acemoglu
et al., 2001; Kuran, 2004; La Porta et al., 2007). Once, modern market-based institutions were
implemented during colonial times they have not been reversed after the end of the colonial rule.

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