Policy Transfer and Diversification in Resource-Dependent Economies: Lessons for Kazakhstan from Alberta

Economic diversification in resource-dependent countries is a difficult process. Most of these countries’ efforts to diversify have been unsuccessful. Alberta is one exception. It has succeeded in diversifying its economy by “diversifying in energy” using explicit policy decisions to promote human capital development in science, technology, engineering, and math (STEM), complement STEM education with education in management and innovation, foster proper market discipline, establish an effective intellectual property rights system, and strengthen links between various industries to support innovation. Kazakhstan's policy makers can learn valuable lessons from Alberta's successes. It is also important to understand that some of the initiatives that were successful in Alberta may not be appropriate for Kazakhstan because of the latter's system of state-guided capitalism and limited public service capacity. Finally, evidence from Alberta suggests that promoting “winning” sectors is a way for favored insiders to capture a share of resource rent and seldom succeed. Related Articles: Khodr, Hiba, and Isabella Ruble. 2013. “Energy Policies and Domestic Politics in the MENA Region in the Aftermath of the Arab Upheavals: The Cases of Lebanon, Libya, and KSA.” Politics & Policy 41 (5): 656-689. http://onlinelibrary.wiley.com/doi/10.1111/polp.12033/full. Khodr, Hiba. 2014. “A Preliminary Comparative Study of Policy Making in Two GCC Countries—Qatar and Kuwait: Processes, Politics, and Participants.” Politics & Policy 42 (2): 271-310. http://onlinelibrary.wiley.com/doi/10.1111/polp.12068/full. Kim, Hae S. 2017. “Patterns of Economic Development: Correlations Affecting Economic Growth and Quality of Life in 222 Countries.” Politics & Policy 45 (1): 83-104. http://onlinelibrary.wiley.com/doi/10.1111/polp.12190/full. Related Media: European Commission. 2003. “Should Developing Country Industrialisation Policies Encourage Processing of Primary Commodities?” The ACP-EU Courier 196: 30-32. http://ec.europa.eu/development/body/publications/courier/courier196/en/en_030.pdf. Litan, Robert E., and Carl J. Schramm. 2007. “Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity.” Council on Foreign Relations. https://www.cfr.org/event/good-capitalism-bad-capitalism-and-economics-growth-and-prosperity. World Bank. 2015. “Economic Diversification and Nonextractive Growth.” In Engagement in Resource-Rich Developing Countries: The Cases of the Plurinational State of Bolivia, Kazakhstan, Mongolia, and Zambia. Washington, DC: World Bank. 28-42. http://ieg.worldbankgroup.org/sites/default/files/Data/reports/chapters/ccpe-synthesis_ch4.pdf.