THE GAP BETWEEN PROCEDURAL AND INSTITUTIONAL EFFICIENCY OF PRIVATIZATION IN KAZAKHSTAN: AN IPE INDEX-BASED ASSESSMENT

Abstract

This article examines the discrepancy between the procedural effectiveness of privatization and its institutional impact, using the Republic of Kazakhstan as a case study. This study proposes an integrated Institutional Privatization Efficiency Index (IPE) based on a two-block model that accounts for both the monetary value of the assets sold and the continuation of state participation. An empirical analysis of quasi-public sector data (2022–2024) showed that, despite a high completion rate of privatization procedures (over 95%), the IPE index value at the republican-level ownership level decreased from 0.976 to 0.087. This indicates a structural discrepancy between the formal effectiveness of privatization and the public sector's actual institutional dynamics. The analysis identified signs of cost-based reproduction in the government’s asset portfolio, which may be linked to investment activity, profit capitalization, accumulation, and asset revaluation within the quasi-public sector. The results indicate that, during the period under review, privatization functioned primarily as a mechanism for redistributing individual assets, without a proportional reduction in the public sector's aggregate asset base. The proposed index can be used to quantitatively assess the institutional effectiveness of privatization.