ASSESSING THE ECONOMIC EFFICIENCY OF GOVERNMENT INVESTMENT INCENTIVE MECHANISMS IN ENSURING ECONOMIC DEVELOPMENT: EVIDENCE FROM UZBEKISTAN
DOI:
https://doi.org/10.5281/zenodo.18472225Keywords:
investment incentives; economic efficiency; government policy; investment climate; economic development; Uzbekistan.Abstract
Improving the investment climate through effective government incentive mechanisms is a key condition for
sustainable economic development in transition economies. This study assesses the economic efficiency of government
investment incentive mechanisms in Uzbekistan using empirical evidence from 2019–2024. Economic efficiency is
evaluated through investment outcomes, financing structure, and sectoral allocation of fixed capital investment. The
results show that Uzbekistan has achieved sustained growth in fixed capital investment and foreign direct investment,
with a clear predominance of non-centralized and private funding sources. This suggests that government incentives have
operated primarily as catalytic mechanisms rather than as direct budgetary instruments. At the same time, the analysis
reveals sectoral concentration and efficiency constraints associated with certain fiscal incentive instruments. The study
concludes that while government investment incentives in Uzbekistan have been economically effective overall, their
long-term efficiency can be enhanced through improved targeting, diversification, and performance-based evaluation.
The findings contribute to the literature on investment policy in transition economies and provide policy-relevant insights
for improving incentive design
References
Cummins, J. G., Hassett, K. A., & Hubbard, R. G. (1996). Tax reforms and investment: A cross-country comparison.
Journal of Public Economics, 62(1–2), 237–273. https://doi.org/10.1016/0047-2727(96)01580-0
Elgar, E. (Ed.). (2017). Investment policy and economic development (pp. 1–320). Edward Elgar Publishing.
Gastanaga, V. M., Nugent, J. B., & Pashamova, B. (1998). Host country reforms and FDI inflows: How much difference
do they make? World Development, 26(7), 1299–1314. https://doi.org/10.1016/S0305-750X(98)00049-7
Hausmann, R., Rodrik, D., & Velasco, A. (2008). Growth diagnostics. In J. Stiglitz & N. Serra (Eds.), The Washington
Consensus reconsidered: Towards a new global governance (pp. 324–355). Oxford University Press.
International Monetary Fund. (2011). The revenue challenge: Tax incentives in Sub-Saharan Africa (IMF Working
Paper No. WP/11/37).
James, S. (2009). Incentives and investments: Evidence and policy implications. Overseas Development Institute.
Organisation for Economic Co-operation and Development. (2022). Investment policy reviews: Uzbekistan. OECD
Publishing.
Organisation for Economic Co-operation and Development. (2024). The role of incentives in investment promotion:
Trends and practices. OECD Publishing. https://doi.org/10.1787/e3338264-en
Rodrik, D. (2008). Industrial policy: Don’t ask why, ask how. Middle East Development Journal, 1(1), 1–29.
Scholarly Express. (2023). Empirical evidence on investment incentive efficiency. World Economics and Finance
Bulletin.
State Committee of the Republic of Uzbekistan on Statistics. (2024). Macroeconomic indicators.
United Nations. (2021). Tax incentives: Selected issues and country experiences. UN Digital Library.
United Nations Conference on Trade and Development. (2024). World Investment Report 2024. UNCTAD.
World Bank. (2009). Investment linkages and incentives: Promoting technology transfer. The World Bank.
World Bank. (2023). Global Investment Competitiveness Report 2023/2024. World Bank Publications.
Zee, H. H., Stotsky, J. G., & Ley, E. (2002). Tax incentives for business investment: A primer for policy makers in
developing countries. World Development, 30(9), 1497–1516. https://doi.org/10.1016/S0305-750X(02)00050-5
Downloads
Published
Issue
Section
License
Copyright (c) 2026 MUHANDISLIK VA IQTISODIYOT
This work is licensed under a Creative Commons Attribution 4.0 International License.