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The Cluster-Based Development Strategy In Kazakhstan’S Agro-Food Sector: A Critical Assessment From An "Austrian" Perspective

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  • Wandel, Jurgen

Abstract

This paper challenges the uselfullness of the cluster-based development strategy to diversify and increase the competitiveness of Kazakhstan’s economy, regarding the case of the country’s agro-food sector. For this it refers to insights of the Austrian Market Process Theory. It is argued that already the theoretical foundations of the cluster concept suffer from severe difficiencies, because it widely neglects the function of competition as a discovery procedure with alert entrepreuneurs as the driving force. Moreover, it ignores the knowledge requirements and limitations in a modern market economy for any outside third party to identify and promote successful industry structures. The closer examination of the implementation of the cluster development program in Kazakhstan’s agro-food sectors shows that cluster facilitation in practice turned out to be another form of social engineering and picking winners. In the light of the Austrian understanding of the market system as an entrepreneurial discovery process the paper suggestes as alternative policy option to concentrate on the establishment of a stable institutional framework for the whole economy that stimulates the entrepreneurial discoveries of profitable businesses. Yet, such an Austrian approach is politically less appealing, for it might bring no quick results due to the prevalence of conflicting informal institutions which in the short run might be difficult to change.

Suggested Citation

  • Wandel, Jurgen, 2010. "The Cluster-Based Development Strategy In Kazakhstan’S Agro-Food Sector: A Critical Assessment From An "Austrian" Perspective," IAMO Discussion Papers 91760, Institute of Agricultural Development in Transition Economies (IAMO).
    • Handle: RePEc:ags:iamodp:91760
    DOI: 10.22004/ag.econ.91760
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    Cited by:

    1. Wandel, Jurgen, 2009. "Agroholdings And Clusters In Kazakhstan’S Agro-Food Sector," IAMO Discussion Papers 91766, Institute of Agricultural Development in Transition Economies (IAMO).
    2. repec:zbw:iamodp:163932 is not listed on IDEAS
    3. Martin Petrick & Dauren Oshakbayev & Regina Taitukova & Nodir Djanibekov, 2017. "The return of the regulator: Kazakhstan’s cotton sector reforms since independence," Central Asian Survey, Taylor & Francis Journals, vol. 36(4), pages 430-452, October.
    4. Julia Hoffmann & Stefan Hirsch & Johannes Simons, 2017. "Identification of spatial agglomerations in the German food processing industry," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 139-162, March.
    5. repec:zbw:iamost:269557 is not listed on IDEAS
    6. repec:zbw:iamodp:91766 is not listed on IDEAS
    7. Vantomme, Katharina, 2017. "Labour rationing of different farm types in Kazakhstan: A shadow price analysis," Studies on the Agricultural and Food Sector in Transition Economies 269557, Institute of Agricultural Development in Transition Economies (IAMO).
    8. Vantomme, Katharina, 2017. "Labour rationing of different farm types in Kazakhstan: A shadow price analysis," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 88, number 88.
    9. Petrick, Martin & Oshakbaev, Dauren & Wandel, Jürgen, 2014. "Kazakhstan's wheat, beef and dairy sectors: An assessment of their development constraints and recent policy responses [Die Erzeugung von Weizen, Rindfleisch und Milchprodukten in Kasachstan: Entwi," IAMO Discussion Papers 145, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    10. Petrick, Martin & Wandel, Jürgen & Karsten, Katharina, 2013. "Rediscovering the Virgin Lands: Agricultural Investment and Rural Livelihoods in a Eurasian Frontier Area," World Development, Elsevier, vol. 43(C), pages 164-179.

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    More about this item

    Keywords

    Agribusiness; Institutional and Behavioral Economics; Research Methods/ Statistical Methods;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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