Beyond Borders: Assessing the Impact of Political Shifts on Informal Trade. A Case Study of the Kyrgyz Republic

Abstract

The Kyrgyz Republic forms a dynamic political context characterized by various shifts in its domestic and foreign political sphere. Thereby, informal cross-border trade has developed as a crucial pillar of the Kyrgyz economy and has become an essential source of income and stability for its citizens. Despite its relevance for society and the state, only limited research has set out to draw a connection between political shifts and informal cross-border trade, and the hidden nature of this trade has made it somewhat difficult to quantify its actual dimensions. Acknowledging the importance of informal cross-border trade, this paper analyses how shifts in the political sphere impact the informal cross-border trade of the Kyrgyz Republic between 2010 and 2022, focusing on its trade relationships with China, Russia, Kazakhstan, and Uzbekistan. This process-tracing case study presents a theorized causal mechanism of how political shifts have increased informal cross-border trade founded in institutionalist theory and the everyday governance framework. The empirical analysis then tests the presence of the causal mechanism. The findings suggest that the causal mechanism is partially validated. Shifts in the political sphere of the Kyrgyz Republic did not consistently lead to an increase in informal cross-border trade during all the years under examination.