The Effect of Regime Change on Poverty in Kyrgyzstan: Evidence from Reconstructed Household Income

Abstract: In the first years of their independence from the Soviet Union, the political landscapes in Kyrgyzstan and Uzbekistan were both characterized by autocratic regimes. While Kyrgyzstan eventually freed itself from the governments firm retention of power, Uzbekistan’s president remained in charge up to his death in 2016. Exploiting the fact that the border between the two countries only materialized after independence and thus provides for a comparable treatment and control group on either side of it, this thesis uses a difference-in-differences model to estimate the effect that the regime change in Kyrgizstan had on poverty. The household’s income data that is used for this purpose is retrieved from matching expenditure aggregates to the quantiles of income distributions for the respective country and year. Surprisingly, and in contradiction with most of the existing literature, the results show increasing effects of democratization on poverty rates in Kyrgyzstan.