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Informality, Business Climate and Legal Cultures in Central Asia 
Chekhros Kilichova (Lund University)
Rustamjon Urinboyev (Lund University)
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Matthias Baier
Sociology & Social Issues
Thursday 14 October, 11:30-13:00 (UTC-4)

Long Abstract

Over the last two decades, all five five post-Soviet Central Asian republics (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) have declared their willingness to reform their business and investment climate. However, inconsistent business ethics standards, widespread corruption and the peculiar way in which rule of law is interpreted and applied (called “the local way of doing business”) have hindered and limited the foreign investment in the region. This is because the Central Asian region is a challenging environment when it comes to navigating and understanding its legal culture and business and economic context. Little is known about how the environment can be navigated. Companies operating in the region have been led by a trial and error approach, often keeping the results of their experiences to themselves and making it difficult for newcomers to gather information quickly on how to operate. Potential investors are faced with at least two additional challenges: First, the risks associated with entering Central Asian markets and running business activities are much higher and involve informal and illegal relations with state officials as well as fierce competition with local business elites who are connected to the higher echelons of the government. Second, a difference in legal cultures, often resulting in a different understanding of business ethics, leads to a conflict between a) what is considered moral, socially acceptable or even legal in the region and b) what is considered good practice, in line with international law and international standards.

Based on the above considerations, our proposed panel aims to promote greater understanding and explanation of the interconnections between legal cultures, local business environments, and governance in Central Asia. More specifically, we are concerned with the way national and international laws, norms, and (written and unwritten) rules come to shape the business environment and governance in five Central Asian countries. In order to do this, the papers proposed in this panel aim to shed light on why some rules and laws are complied with, while others are ignored or avoided, and why some rules are bent or violated in support of personal objectives and benefits. We aim to compare visible and “invisible” practices, official and unofficial ones, explaining why and how a law is adopted and written on paper, how it is interpreted, applied in practice, and translated into practical recommendations in practice, and how the target group responds to the new provisions generated by a new law.

Accepted papers: