Ordered to Volunteer? Institutional Compatibility Assessment of Establishing Agricultural Cooperatives in Uzbekistan

In places where state has been historically the most dominant actor of all reforms, it can be particularly challenging to develop non-state forms of organization and governance such as agricultural cooperatives known to reduce transaction costs and utilize economies of scale. This paper explores the latest state policy on the development of agricultural cooperatives in Uzbekistan through the prism of its compatibility with the existing institutional conditions. An exploratory case study approach was used to conduct interviews with representatives of key actors involved in the policy formulation at the national scale and its implementation in two pilot provinces. Applying the analytical instruments of the procedure for institutional compatibility assessment (PICA) on the one hand and based on empirical insights from in-depth interviews (n = 22) and internal policy documents on the other hand, we have identified a set of crucial institutional aspects (CIAs) and their relative importance for the establishment of the cooperatives in Uzbekistan. In addition to the incompatibility of an excessively and exclusively regulatory nature of the intervention with the desired voluntary form of cooperatives’ organization, we find that main sources of the policy (in-)compatibility lie within the degrees of information asymmetry, farmers’ trust towards the state, and the capacity of the authorities. Although the state’s top-down approach was effective at quickly establishing the cooperatives formally, most farmers were informed about the policy only symbolically, who then remained largely skeptical about its value, and considered the state responsible for its implementation. The findings highlight the need for a change in broader institutional environment and allowing time for learning and internalization of self-organization principles by farmers in order to make the economic advantages of cooperatives possible