Improving market infrastructure for small entrepreneurship in Uzbekistan

A sociological opinion on export potential, employment, and social inclusion

Bibliographic Data

ID24218392
AuthorsFiruza Saidkulova (Bukhara State University), Dilafiruz Narzieva (Bukhara State University), Nigina Chorieva (Bukhara State University), Firuza Achilova (Karshi State Technical University), Jasurbek Jonibekov (Bukhara State Medical Institute named after Abu Ali ibn Sino), Mokhichekhra Rajabova (Bukhara State University)
Year2026
Volume11
Publication date2026-10-01
Open AccessYes
TypeARTICLE
VenueFrontiers in Sociology (JOURNAL)
Journal identifiersISSN: 2297-7775 • E-ISSN: 2297-7775
PublisherFrontiers Media SA (PUBLISHER • CH)
DOI10.3389/fsoc.2026.1926726
OpenAlexW7215067564
LanguageEN
References cited27

Uzbekistan has moved further and faster on small-business reform than most countries in the post-Soviet region. Between 2017 and 2025 the share of small business in GDP rose from roughly one third to over half, and the number of registered small entities reached 1.21 million by October 2025 (State Statistics Agency, 2025). The country was recognised as one of the five largest global improvers in the 2024 Women, Business and the Law index, with an 11.9-point gain taking its score to 82.5 (World Bank, 2024). The Uzbekistan-2030 strategy targets a doubling of exports and an increase in the number of exporting enterprises from roughly 5,700 to 15,000 (Ministry of Investment and Foreign Trade, 2024).These figures have been read almost exclusively through an economic and engineering lens. The dominant policy frame treats market infrastructure as a matter of roads, customs procedures, payment systems, credit lines and digital platforms. That frame is not wrong. It is incomplete in a specific and consequential way, and the way it is incomplete is sociological. This article makes a conceptual argument rather than reporting new data. Our contribution is not the observation that markets are socially embedded, which has been established since Polanyi (1944) and Granovetter (1985). It is threefold and more specific.First, we argue that the social layer of market infrastructure should be treated as infrastructure in its own right, not as context surrounding the "real" infrastructure. This extends to a post-Soviet setting the argument developed by Elyachar (2010) for Cairo, where the communicative channels produced by women's everyday sociality function as economic infrastructure in the same register as roads and telephone lines, and it connects that argument to Star's (1999) and Larkin's (2013) insistence that infrastructure is relational and becomes visible only through the practices that sustain or fail to sustain it.Second, we specify the mechanism by which social structure acts on formally universal infrastructure. We call it differential access filtering, and we decompose it using the four sources of social capital distinguished by Portes and Sensenbrenner (1993), namely value introjection, bounded solidarity, reciprocity exchanges and enforceable trust. Two of these enable market participation and two constrain it, which gives the framework an internal reason to expect both positive and negative effects rather than asserting one or the other.Third, we propose Uzbekistan as a scope condition for embeddedness theory. Most of the informality and embeddedness literature has examined settings where formal institutions were weak, absent or decaying (Mair and Martí, 2009;Williams and Shahid, 2016). Uzbekistan presents the inverse configuration, in which formal market infrastructure is being built rapidly and from above onto a dense, legally codified communal institution. The theoretical question this raises is whether embeddedness under rapid state-led formalisation produces bridging or closure, and our answer is that it systematically produces both, with the balance determined by which of the four mechanisms a given reform activates.The article proceeds as follows. Section 2 develops the theoretical framing. Section 3 sets out the fivelayer framework and its social mediators. Section 4 reads the mahalla symmetrically. Section 5 applies the framework differentially to five entrepreneurial positions. Section 6 states explicitly what the available evidence does and does not support. Section 7 discusses feasibility of the policy implications. Section 8 sets out the theoretical contribution, limitations, testable propositions and research agenda.Infrastructure studies in sociology and anthropology have moved decisively away from treating infrastructure as a stock of physical assets. Star (1999) argued that infrastructure is relational rather than substantive, that it is embedded in other structures and practices, and that its distributional properties become visible mainly at the point of breakdown. Larkin (2013) extended this by treating infrastructures as objects that carry political and aesthetic meaning as well as goods, and by showing that the promise attached to an infrastructure is part of what it does. Graham and Marvin (2001) documented the process by which networked infrastructure, far from producing uniform access, splinters into premium and residual circuits. Elyachar (2010) took the argument one step further in a way that is directly relevant here. Studying microfinance and empowerment projects in Cairo, she showed that the communicative channels generated by women's routine sociality constitute a social infrastructure that carries economic traffic as surely as a road does, and that development interventions make this infrastructure visible precisely by attempting to capture or format it. We take this as our starting point. If social ties are infrastructure, then a five-layer account of market infrastructure is not a four-layer account plus context. It is an account of five infrastructures, one of which happens to be made of relationships.Economic sociology supplies the mechanism. Granovetter (1985) established that economic action is embedded in concrete networks of relations. Portes and Sensenbrenner (1993) then did the analytical work that the embeddedness literature most often omits, distinguishing four mechanisms by which social structure shapes economic action and, crucially, identifying their positive and negative consequences together. Value introjection and bounded solidarity generate commitment and mutual support but also generate demands for conformity. Reciprocity exchanges and enforceable trust lower transaction costs but also impose obligations that can drain the successful and restrict the individual autonomy on which enterprise growth depends. Portes and Landolt (1996) and Portes (1998) developed the resulting downsides, namely exclusion of outsiders, excess claims on group members, restrictions on individual freedom and downward levelling norms. We adopt this four-mechanism decomposition as the analytical core of our framework, because it is what allows a symmetrical reading of communal institutions rather than a celebratory one.Two further strands complete the framing. The contextualisation programme in entrepreneurship research insists that where and when entrepreneurship happens is constitutive rather than incidental (Welter, 2011;Welter et al., 2019), and Kloosterman's (2010) mixed embeddedness perspective shows how the resources an entrepreneur can mobilise from social networks interact with the opportunity structure that markets and regulation supply. Meanwhile, the entrepreneurial ecosystem literature has become the dominant policy vocabulary for the phenomena we describe, and its own systematic reviews concede that it remains largely atheoretical and built on advanced-economy assumptions, with resource scarcity, structural gaps and institutional voids distinguishing emergingeconomy ecosystems (Cao and Shi, 2021;Wurth et al., 2022). Our framework is intended in part as a sociological supplement to that literature, replacing its metaphor of an ecosystem of actors with an account of layered infrastructures and the filters that regulate access to them.By market infrastructure we mean the bundle of arrangements that allow a small firm to find customers, set prices, secure finance, manage logistics and enforce rights. We distinguish five layers. The physical layer covers roads, warehouses, bazaars and border posts. The financial layer covers banks, microfinance, payment instruments and credit lines. The digital layer covers e-commerce, platform identifiers, e-government and data systems (Nambisan, 2017;Bonina et al., 2021). The institutional layer covers registration, taxation, standards and dispute resolution. The social layer covers trust networks, reputational systems, professional associations, rotating savings groups and the mahalla.The analytically important claim is not the existence of five layers but the relation between them. Access to any of the first four layers is mediated through the fifth, and the fifth distributes that access unequally. A credit assessment reads a reputation that is produced in a network. A customs procedure is navigated with the help of brokers and peers who have navigated it before. A digital marketplace is adopted first by entrepreneurs whose existing ties already include early users, which is why platform adoption tends to follow pre-existing network structure rather than to disrupt it (Bonina et al., 2021).Where public investment addresses the first four layers without engaging the fifth, returns are eroded by filtering rather than by underprovision. The new road serves the bazaar of the better connected. The new credit line reaches firms with formal collateral. The new platform recruits younger urban men with smartphones and foreign-language skills. This is the splintering dynamic that Graham and Marvin (2001) described, produced here by social rather than commercial sorting.Urban evidence from Uzbekistan supports this reading at the level of the layers themselves. Farmanov et al. (2025), examining smart-city implementation in Bukhara, find that deployment of sensors, platforms and digital governance tools has run ahead of the inclusivity and citizen-engagement components, so that a technically advancing infrastructure is not correspondingly more usable. Dushanova et al. (2025) document the same asymmetry in the city's tourism infrastructure, where heritage sites, transport and wayfinding remain inaccessible to people with mobility impairments despite a national policy commitment to barrier-free provision. Both cases show a filter that is not social in the network sense but produces the same result, namely infrastructure that is formally universal and practically selective. They also support treating market infrastructure as a sociotechnical assembly rather than a technical one, which is the premise of Section 2.In the Uzbek case we identify five social mediators through which the filtering runs, namely mahalla networks, gender norms and the unpaid care burden, the urban-rural divide, the informal economy, and labour migration. These are not causes in a statistical sense and we do not claim to have estimated their effects. They are the channels through which formally universal infrastructure becomes differentially accessible, and Section 6 states precisely how much evidence stands behind each.Figure 1. Five-layer framework of market infrastructure for small entrepreneurship in Uzbekistan. Infrastructure layers reach policy outcomes only through social mediators. Each mediator has an enabling and a restricting side, corresponding to the four mechanisms of social capital in Portes and Sensenbrenner (1993). Which side dominates depends on the mechanism a given reform activates.mahalla solidarity has historically rested on residence rather than kinship or ethnicity, which gave it an unusually broad reach across social groups. Urinboyev and Eraliev (2022) describe the mahalla as a legally plural arena in which competing orders coexist and produce new organisational forms, some of them generative.On the restricting side, the record is at least as substantial and considerably older than our earlier draft acknowledged. Three findings matter for market infrastructure specifically.First, the mahalla's incorporation into public administration has converted an association of residents into an instrument of state administration and, in the assessment of a large body of work, of social control (Urinboyev, 2011;Noori, 2006;Human Rights Watch, 2003). Urinboyev and Eraliev (2022) situate this within broader debates on how non-democratic states neutralise civil-society institutions through administrative and legal incorporation. An entrepreneur's relationship with the mahalla is therefore not a purely horizontal relationship among peers. It carries a vertical dimension, and any policy that routes market infrastructure through the mahalla routes it through that vertical dimension too.Second, mahalla-based discretionary allocation has documented exclusionary effects along gender lines. Kamp (2004) shows that the delegation of welfare targeting to mahalla committees, staffed by untrained neighbours exercising discretion, placed divorced and abandoned women at particular risk of exclusion, and that solidarity among women in a mahalla cannot be assumed. This is bounded solidarity and enforceable trust operating exactly as Portes and Sensenbrenner predicted, producing support for insiders and exclusion at the boundary. If discretionary neighbourhood assessment produces this pattern in welfare, there is no principled reason to expect a different pattern when the same bodies certify cooperatives, endorse borrowers or vouch for exporters.Third, the conformity costs fall unevenly. Restrictions on individual autonomy and downward levelling norms are the two downsides of social capital most directly relevant to enterprise growth (Portes, 1998;Portes and Landolt, 1996). Ethnographic work on women traders in Uzbek bazaars describes exactly this tension, with women negotiating and renegotiating patriarchal norms rather than simply being enabled or simply being blocked by them (Kandiyoti, 2007).The implication for policy is that "recognise the mahalla" is an underspecified instruction. What matters is which mechanism a given reform activates. Instruments that work through reciprocity exchange, such as linking gap groups to formal microfinance, plausibly extend access. Instruments that work through discretionary gatekeeping, such as making mahalla endorsement a condition of registration, credit or certification, plausibly reproduce existing exclusions and add a vertical dependency. We return to this distinction in Section 7.A framework that applies identically to everyone explains nothing about distribution. Table 1 applies the five layers and their filters to five entrepreneurial positions whose constraints differ, which also responds to the reasonable objection that "small entrepreneurship" is not a single category. Three points follow from the table. The binding constraint differs by position, so a single infrastructure package cannot be expected to have uniform effects. The same mechanism that helps one position hinders another, which is why a framework built on Portes and Sensenbrenner's symmetric account is more useful here than one built on social capital as an unambiguous good. And the reforms most likely to backfire are, in several rows, the reforms currently most favoured, namely discretionary community endorsement and platform-first digitalisation.Two of the three policy outcomes named in the title deserve explicit grounding, since the framework is meant to bear on them.Export concentration is documented. In 2024 gold, services and industrial goods together accounted for roughly 70 percent of total exports (Observatory of Economic Complexity, 2025; U.S. Department of Commerce, 2025), and the number of exporting enterprises stood at around 5,700 in mid-2024 against the 2030 target of 15,000 (Ministry of Investment and Foreign Trade, 2024). The shortfall is usually read as a logistics and certification problem. Our framework suggests it is also a trust problem, since enforceable trust built on personal relationship and cash does not travel across borders and infrastructure that supplies no substitute concentrates gains among firms already connected to international buyers. The concentration is a fact; its attribution to social filtering is our proposition.Employment is where the filters compound. Women's labour-force participation is approximately half that of men, and women perform more than twice the male average of unpaid care work per day (UNDP, 2025;Popova and Otrachshenko, 2026), which constrains the time and mobility available for enterprise before any infrastructure question A substantial share of small-business in bazaars and formal labour so effects of infrastructure reform are in the data to them. and find for that women's for business do not onto the and opportunity from which is a further reason to expect uniform instruments to perform across the positions in Table a because it is the one with the using data from that in business only when are by other or which the binding constraint in financial rather than in reached in with the large in Department of Commerce, 2025). The policy that large into small-business does not follow from the and the suggests that instruments and credit are more likely to work than instruments assessment that our earlier draft several as established when are not is well Table 2 states the of We adopt three namely where the claim on data or on where supports the claim but its or and where the claim is an argument by this article and We two from Table The for the argument is The and claims are and should be read as propositions rather than Section 8 the most important of them in testable and we state feasibility rather than assessment of infrastructure infrastructure projects in Uzbekistan already and economic so the institutional for assessment a distributional is an administrative rather than a new feasibility depends on data that namely by and by urban and and does namely access data. The is that the instrument is and and that the is within a statistical work with the Section 4 that the is not between and the mahalla but between gap groups to formal microfinance through reciprocity and the mahalla to do what it already mahalla endorsement a for certification or through discretionary and it to do what the record suggests it does unevenly. The first is and The is and carries the risk documented by Kamp endorsement is an the mahalla is the and whether such a function is an and mutual of market infrastructure, is a third in this and it is in this formalisation rather than The literature that informality where formal from norms of and that formalisation does not that gap and Shahid, et al., The evidence describes formalisation as a with rather than a which instruments that lower the of the first step and make the visible here is in and in political since the return is do not claim that these instruments produce the three policy We claim that are with the mechanism the framework and that are to be article makes three to sociological rather than to policy treats the social layer as infrastructure rather than as (2010) account of social infrastructure from an setting to one of rapid state-led and it to the vocabulary that policy This matters because the two currently do not Infrastructure studies has the relational and on policy Infrastructure policy has the instruments and no account of relational the filtering mechanism using Portes and Sensenbrenner's (1993) four sources of social which a framework that enabling and restricting effects from the same structure and therefore cannot be to communal institutions by a scope The embeddedness and informality have largely examined or formal institutions (Mair and Martí, 2009;Williams and Shahid, 2016). Uzbekistan the inverse case of dense, legally codified communal institutions rapid formal infrastructure. Our claim is that this produces bridging and and that the balance is determined by which of the four mechanisms a reform activates. That is a claim about the under which embeddedness different and it is of new digital market infrastructure by small firms pre-existing network position more than it firm or digital that through reciprocity exchange, such as linking rotating savings groups to formal microfinance, access, reforms that through discretionary community endorsement it, with the among women without male mahalla endorsement as a to formal infrastructure, exclusion concentrates among the same in welfare namely and responds more to certification and which substitute for personal than to in logistics of business responds to of and savings in credit assessment rather than to with formalisation with an early and visible produces formalisation than of administrative the this is a conceptual article and presents no data. from and international whose and in particular carry the mahalla literature we on is across with the work from the and the reform so the to which the documented control in is an question that our argument rather than the five mediators we identify are not and are not of one another, since gender care and mahalla governance are rather than and a framework that them as filters that propositions in Section a research programme with three A of small firms that platform adoption network position and is with existing infrastructure. A of with and without in credit or certification and and is the we as most because it directly on a policy of credit which is currently being in with an unusually the sociology of markets a it has namely communal institutions state-led market embeddedness under or is not a question that can be from the existing literature, most of which was developed in settings where the state was rather than Uzbekistan is a to find

Employment · Entrepreneurship · export potential · gender and entrepreneurship · market infrastructure · market participation · post-Soviet transition · relational infrastructure · Small business · Social capital · social inclusion · sociology of markets · trust and reciprocity · Uzbekistan · women's social networks · Economic and Industrial Development · Entrepreneurship Studies and Influences · Migration, Ethnicity, and Economy

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