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Abstract
The public sectors of the Central Asian states still exhibit many of the characteristics of the former Soviet Union. Although the measured size of the public sector, relative to GDP, has been reduced in all countries, governments continue to exert a strong influence on most aspects of economic activity through traditional budgetary operations (central and local budgets as well as various extrabudgetary funds); quasi-fiscal operations performed by the state-owned financial and nonfinancial enterprises; extensive regulation of several aspects of economic and social activity; and informal links enabling government administrators to influence and guide decisions by state enterprise managers and many seemingly privatized enterprises.1 The relative size of the general government sector in these economies was curtailed by the persistent decline in the revenue base (see Section VIII), limited capacities of these countries to access foreign funding, and the need to contain fiscal deficits to levels compatible with restrained financial policies, rather than by discrete measures to contain government operations.
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