Kazakhstan’s Agricultural Economy after the Accession to WTO: Economic Transformation and Realistic Dilemma

Abstract

As a country in modernization transition, Kazakhstan's economy has experienced a struggling process of integrating into the globalization for its accession to the WTO behind the dazzling prosperity, especially its vulnerable yet vital primary industry. Previous research stressed the agricultural economic management issues in Kazakhstan, emphasizing the static one-dimensional agricultural policy research. Compiling data analysis from the databases of the Republic of Kazakhstan Bureau of National Statistics, World Trade Organization, and World Bank, we aim to illustrate, from the theoretical perspective of new institutional economics, that while informal institutions standing still, the market economy reform, which is the transplant of the formal institution, has the endogenous dynamic effects on Kazakhstan's domestic economic sectors, especially its underdeveloped agriculture. Kazakhstan’s commitments to market access, domestic support, import subsidies, and technical barriers, are detrimental to the development of Kazakhstan's agriculture, followed by the influx of homogeneous goods, increased costs of agriculture, potential technological barriers, and even a dysfunctional industrial structure. With insufficient primary conditions, Kazakhstan's market-oriented economic reforms fluctuate the foundation of the industry, laying a hidden danger for the further modernization transformation. Actually, this dilemma of institutional transition is not a particular case in Kazakhstan, but a feature common to most developing countries undergoing modernization.