Factoring Aid Agents into VAT Policy Reform in Kyrgyzstan: Social Groups, Factions and the Politics of Resource Distribution

In present-day Kyrgyzstan government rhetoric is all about replenishing the national budget. Meanwhile, Bishkek’s business association ringleaders lament that this overshadows the development of SME-friendly tax regimes. The VAT registration threshold is a centerpieces of the debate. The policy contest around it takes place within a particular type of political economic hybridity which this paper attributes to non-OECD contexts: the interaction between the politics of resource distribution structured around social layers and economic sectors, and the politics of resource distribution structured around elite factions, clientelism and patronage. Operating in such settings, foreign institutional assistance programs are prominent policy process players in many non-OECD countries. This paper explores the case of Parliamentary, ‘competitive clientelist’ Kyrgyzstan. It factors development aid professionals into the hybrid political economy of VAT reform in Kyrgyzstan, and shows how local ‘knowledge experts’ and their expatriate colleagues navigate, engage with and influence the dynamics at hand