Informal Governance and Corruption

Kazakhstan

Kazakhstan has developed and sustained a complex networked-based governance system which exhibits the single-pyramid or ‘vertikal’ organisational hierarchy common across post-Soviet Eurasia (see Henry Hale, Patronal Politics: Eurasian Regime Dynamics In Comparative Perspective, CUP 2015); Alena V Ledeneva, Can Russia Modernise?: Sistema, Power Networks and Informal Governance, CUP 2013).  In Kazakhstan, Nursultan Nazarbaev has been in power since before the collapse of the USSR and has never encountered any serious political challenges, investing considerable resources to achieve overwhelming electoral victories and enjoying high levels of legitimacy and popular support, all the while relying on and entrenching a system of informal networks. While power and patronage in Kazakhstan are thus ultimately subject to the determination of the apex of the pyramid (the President), the intermediate levels of the hierarchy have exhibited a considerable degree of flux over the period since independence.  Informal governance in Kazakhstan is thus at the same time structured and dynamic, making for a system that is metastable over the long term, but shifting and not entirely predictable in the short term. The Kazakh sub-networks have aggregated around particular figures or nodes (the President’s daughter, the chief of the security services, prominent bankers and businessmen) only to disaggregate and re-form or merge with other networks as the political fortunes of the network nodes rise and fall, all the while the principal network under Nazarbaev has retained its over-all dominance and control.

A special report, which has been written about the impact of networks on human resource management practices in Kazakhstan, can be downloaded below.

The Kazakh networks and the political system they developed and built thus tolerate a  fair degree of entrepreneurial initiative and decentralised political decision-making (the regions exercise a fair amount of discretion), but they carefully police political expression and forestall challenge to the centre.  The networks in Kazakhstan have formed around family, regional, ethnic, clan and other identities.  Their political influence and sway is a function of a complex calculus and interplay of these factors (members of non-Kazakh  networks, e.g., are generally barred from directly occupying political posts but may have important business ties to interests abroad)

Kazakhstan is an unusual (or at least especially well-developed) case in Central Asia (and distinct from the African countries in our study) for the degree to which its internal informal governance system is connected to—and dependent on—much broader circuits of global financial and economic exchange and activity.  Foreign actors, both public/governmental (and intergovernmental) and private/commercial, have played a significant role in both enabling the governing Kazakh networks to grow and thrive and accommodating, facilitating, or directly exploiting the mechanisms, processes and opportunities of informality.

Our research to date has addressed several aspects of informality in Kazakhstan to yield a composite picture which is both structural (major patterns) and granular (everyday practices).  A report relying on internal sources and materials has researched recent prominent scandals and corruption cases and mapped the relations and chief nodes of the informal governance networks inside the country, particularly addressing the significant shifts and realignments of the last several years.  A major finding of this report is the manner in which anti-corruption legislation and related reforms have been instrumentalised by governing networks in Kazakhstan as a tool of internal network discipline. Anti-corruption measures and policies implemented by Kazakh authorities may in some limited fashion have served to control/deter selective episodes of corruption, but ultimately in the interests of enforcing network control of its membership and reinforcing the existing network-based scheme of governance in general.  Much as in Kyrgyzstan the legal system and legal reforms to that system are overseen by networks who exploit and ‘deploy’ them strategically. 

Another report by the same researcher has investigated the changing salience of clan, kinship and affective ties in the operation of the informal governance system at the most grass-roots level, in the lives of the citizenry in their quest for government services.  Whereas formerly affective ties played a central role and individuals relied on affective ties to power- and office-holders and bureaucrats (patrons) to facilitate the provision of services, comply with official requirements, or solve problems, increasingly economic and financial exchange has displaced identity or ‘connections’. Although end-users can be far from the workings of the networks, the increasing sophistication and complexity of the network-based system over the decades since independence has altered the formerly straightforward affective economy although it has not entirely displaced it. Thus informality persists, but is basis and configuration have shifted.

 A complementary report by a researcher in the UK has been based on some additional domestic sources at fairly senior levels but has drawn as well on expatriate and foreign sources (UK-based) to corroborate and fill out the picture of the flows of resources and power through the networks by demonstrating the connection to transnational resources and power.  Kazakhstan is both a hugely important object of foreign direct investment, in light of its prodigious hydrocarbon, mineral and other extractive resources, as well as a formidable actor and investor in its own right and through its burgeoning commercial and financial sectors in economies in Europe, Asia, and elsewhere. Thus the Kazakh networks are fully global in their scope and operations: Kazakh networked interests make liberal and vital use of foreign services (UK and other Western law firms), business forms (off-shore and other corporate vehicles established abroad), transactions and arrangements (complexly structured deals involving multiple foreign parties), and legal systems (statutes and regulations on the one hand and courts and dispute-resolution processes and fora on the other).

Download: Human resource practices in Kazakhstan

Forthcoming: Kazakhstan country report