Connecting the dots: A historical and political analysis of economic reform and its relationship to foreign investment and business in Kazakhstan and Uzbekistan

This study combines the economic and the political transition literature in order to undertake a comprehensive analysis of the reform processes of Kazakhstan and Uzbekistan from 1991--2003. Information from interviews conducted with economists from the financial institutions as well as information from interviews conducted with representatives from the business community complemented the data analysis of economic reform. This dissertation uses precondition variables hypothesized to explain the differences in the reform processes of each country better than a focus on a country's political categorization (former Soviet elite).; The analysis of the strength of the pursuit of economic reforms by each leader was the strongest indicator as to whether reforms would be advanced or delayed. When there were instances of opposition (in Kazakhstan), Nazarbayev manipulated the political system in order to bring in supporters of his reform policies and to oust his opponents. In Uzbekistan, Karimov reversed reform policies when problems in the country's terms of trade did not bring in the needed revenue for the state. The level of turnover of the former Soviet elite (president and governmental officials) does not explain the level of advancement of reforms because Nazarbayev is a member of the former Soviet elite. Kazakhstan's higher level of integration with Russia during the Soviet regime resulted in policies of more international economic orientation. Uzbekistan's lower level of integration resulted in less of a need to engage the international community.; The analysis from the results of the interviews with investor and business representatives indicated that each type of firm understood the variable of economic reform in different ways based on the type of risk the firm perceived as important to their investment or business decision. Additionally, while Uzbekistan's slower progress on economic reform affected its level of business it did not affect the number of firms doing business in the country. This was mainly because firms could secure the financing for the business through the Export-Import bank, or another foreign financing bank.