Paper abstract:

The collapse of the Soviet Union paved a way for many post-Soviet countries to liberalize their economies and to implement more laws on private ownership and market-oriented principles by introducing Western values into the business climate. Many scholars argue that the oligarchic capitalism of the early 1990s and current monopoly-based business structures rose as a result of the weak presence of states which were forced to seek financial capital in exchange for questionable legitimate political and economic rights in the post-Soviet area. Under the slogans of legalizing the economy by defeating the shadow economy and corruption, many post-communist countries, including Uzbekistan, created new informal ways to control and manage the big businesses and create favourable conditions for their future progression, while at the same time pursuing both legal and economic oppression to the medium and small-scale businesses which led to the natural emergence of business networks. Institutionalization of business networks is consigned by some researchers to the periphery of economic studies, but in the case of postcolonial countries, we can observe that socio-legal motives of such an institutionalization are serving as a primary engine not only of economic development, but also of the democratization of laws shaping the business climate, eradicating corruption in the private sector, and involving new ethical standards in economic interactions within their business networks and beyond it. As in the case of Uzbekistan, business networks are considered by local politicians as important actors to support the government to better the legal conditions for the operating businesses and to enhance the taxation and financial systems in a way to empower the shift of small and medium companies to the larger scale with the sake of targeting bigger markets within the state and in the region. Hence, by engaging with widespread academic debates, this article provides analyses of both the ‘dark’ and positive sides of the institutionalization of business networks from the socio-legal perspective through the case of Uzbekistan.

Keywords: business networks, corruption, business law, social norms, Uzbekistan.