Drawing from the literature on urban informality and taking into account the particular institutional context of a post-Soviet city, this paper explores how citizens gain access to welfare benefits through informal everyday interactions with the state at the street-level: in public schools, health clinics, and crowded offices of public bureaucracies. These interactions often entail informal arrangements, which involve exchange of favors, gifts, and bribes. As a result, we observe a peculiar form of urban governance, where the state scales back distribution of welfare but at the same time tolerates the informal and at times extralegal arrangements between the people and the street-level bureaucrats. This paper explain why the state tolerates and even encourages informality by maintaining old and introducing new unenforceable regulations. This research is informed by ethnographic fieldwork in Bishkek.