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While the poor quality of governance is widely accepted as a main factor hampering economic development in Central Asia, one of the main ways to solve this problem is often connected with changing the allocation of authorities, shifting them to the supranational (regional integration) or subnational (decentralization) levels. Both aspects have been widely discussed, but the progress remains extremely limited. This paper claims however, that in spite of deficit of formal institutions, informal decentralization and regional integration have been important factors with a profound impact on economic and social development of Central Asia. However, the impact of informal shifts of authority on institutional development is not unambiguous.
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