Kazakhstan is at risk of becoming a hollow state

Kazakhstan is gradually sliding into a situation where it could become a hollow state, a state that technically preserves its functionality but loses its real power by transferring its key functions to private entities and intermediate agencies. Let’s examine what is happening in this sphere in Kazakhstan.

Cooperating closely with private companies, service organizations and non-governmental organizations (NGOs) as well as transferring some public functions to them are common practices beneficial for regular citizens (consumers).

Why it is helpful:

1. The private sector completes its tasks more efficiently as it is more open to innovations and cutting expenses;
2. The administrative culture is being replaced with a servicing culture. Just believe me, there is a big difference between applying for an ID at the police station (as it was years ago) and at the local Citizens Service Center (CSC);
3. The private sector gains new jobs and lowers the burden on public organizations.

It is wonderful, isn’t it? But there is still some nuance.

When the government gives up some of its operational functions, it should enhance its regulation and monitoring role and demand more accountability instead. If not executed properly, these risks may arise:  

1. Loss of control and accountability. The contractor’s liability is not the same as that of the state authority when providing public services. With less public oversight, there is a greater temptation to cut costs at the expense of the quality of services in pursuit of higher profits;
2. Expenses don’t decrease as public agencies beef up their spending on regulation, monitoring and evaluation. Additionally, dependence on vendors grows, driving their appetite for more money;   
3. Private businesses pursue their own profits, while public organizations must prioritize fair distribution. You can find a lot of examples of this approach in academic literature: in large countries, private contractors often abandon small, remote areas first, focusing on larger cities instead. This worsens the divide between people from different regions even more;
4. Private and administrative data can be stored, transferred and manipulated. Data is power. For instance, transferring the housing waiting list and all relevant data to Otbasy Bank means that the government shared some of this power with the bank, which doesn’t carry the same level of accountability.

All of this works well only for a state with strong administrative capabilities. It could function, for example, within the well-developed public administration traditions of Germany, shaped by lawyers, or in the American system, which emphasizes monitoring and result evaluation. We don’t have such a system yet.

In order to solve short-term tasks, the government gives up its functions and public services in favor of private businesses. However, we’d better discuss how to boost the potential of public agencies to let local heads of executive bodies manage their housing waiting lists effectively rather than establish another «development institute» within the quasi-state sector.  The state apparatus «turns off,» giving up its position and competencies to other organizations primarily hungry for profit and achieving its corporate goals rather than long-term social interests.

Another case: the Government for Citizens State Corporation has revealed that they want CSCs to go private. This means that someone will make a profit on providing administrative and social services. This is complete nonsense, in my opinion. This is why I was happy to hear MP Smyshlyaeva comment on the topic:

«Those numerous ‘handlers’ (people who offer their unofficial services to streamline visitors’ requests) around CSCs haven’t gone anywhere. Moreover, they are institutionalizing into consulting firms. Meanwhile, people from rural areas still need to travel dozens of kilometers to get public services. On top of that, there are questions about personal data protection.»

Other examples include transferring infrastructure and utility facilities to «investors» and allowing techno-banks to render public services. Throughout the world, governments are concerned about competition with tech giants and seek a way to reduce their influence and protect state interests. Yet, here, we may soon see Egov itself phased out, with services delivered through banks. How can this not be viewed as a direct threat to the state’s autonomy and administrative capacity? Egov must remain as it is. Remember the trading of individual identification numbers after the start of the special operation? (A so-called special military operation by Russia in Ukraine.) When did that become acceptable?