THE CLUSTER-BASED DEVELOPMENT STRATEGY IN KAZAKHSTAN’S AGRO-FOOD SECTOR: A CRITICAL ASSESSMENT FROM AN "AUSTRIAN" PERSPECTIVE
2017
Wandel, Jurgen
This paper challenges the uselfullness of the cluster-based development strategy to diversifyand increase the competitiveness of Kazakhstan’s economy, regarding the case of the country’sagro-food sector. For this it refers to insights of the Austrian Market Process Theory. It is arguedthat 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 alertentrepreuneurs as the driving force. Moreover, it ignores the knowledge requirements andlimitations in a modern market economy for any outside third party to identify and promotesuccessful industry structures. The closer examination of the implementation of the clusterdevelopment program in Kazakhstan’s agro-food sectors shows that cluster facilitation inpractice turned out to be another form of social engineering and picking winners. In the lightof the Austrian understanding of the market system as an entrepreneurial discovery processthe paper suggestes as alternative policy option to concentrate on the establishment of a stableinstitutional framework for the whole economy that stimulates the entrepreneurial discoveriesof profitable businesses. Yet, such an Austrian approach is politically less appealing, for it mightbring no quick results due to the prevalence of conflicting informal institutions which in theshort run might be difficult to change.
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