Informality is omnipresent—from rural microeconomics to international politics, and our knowledge of many phenomena is incomplete without an understanding of their informal components. Informal practices are particularly pervasive in the countries of former Soviet Union (FSU), shaping most of the region’s social and political processes and institutions. Yet, despite a somewhat recent growth of the literature on the topic, in-depth studies of the phenomenon are far and few between, and the study of informality in most academic disciplines falls below the radars of mainstream research. Huseyn Aliyev makes a valuable contribution to the study of informality by corralling multiple strands of fragmented and contrasting literature into an insightful review of the phenomenon. His conceptual exploration is supplemented empirically by three case studies showcasing how, when, and under which conditions democratic reforms affect informal institutions in the FSU region.
Aliyev draws a particularly helpful distinction between informal institutions, networks, and practices, while highlighting how the three are inextricably intertwined and how they converge with formal institutions and processes. While various academic disciplines commonly prefer one of the three concepts over the others as units of analysis, Aliyev emphasizes the importance of transcending a single-dimensional view of informality (as either an institution, a network, or practice) and engages an inclusive approach in this book. He states: “Expanding the research beyond economic and political perceptions of informality requires researchers to traverse institutions, networks, and practices and present the informal sphere as a combination of all these categories” (33).
Delivering a rather broad definition of informality as “a sphere that lies outside the formal, legally bound, and defined spheres of human activity” (33), Aliyev suggests that the two spheres—formal and informal—are also highly interconnected, if not fused. He further appeals to a pressing “need to reexamine the boundaries between formal and informal spheres.” The ephemeral, transitory, and elusive nature of informality not only blurs the boundaries between formal and informal spheres, but also between the sectors of society. Blurring the disciplinary boundaries in research of informality, Aliyev correctly points out, is likewise advantageous.
Upon providing a theoretical review of informality, and its role and preconditions in the countries of the FSU, Aliyev then moves to the specific case studies of three countries that have attempted reform processes to varying degrees since the dissolution of the USSR, namely, Georgia, Moldova, and Ukraine. His rationale for selecting these three lies in the notion that, unlike most other countries in the region (with the exception of Lithuania, Estonia, and Latvia), their governments “have systematically and purposefully sought to formalize, liberalize, and decentralize their state institutions” (91), making it uniquely possible to assess the effects of reform implementation on the prevalent informal institutions. While Aliyev’s literature review appears rather comprehensive, it is in the presentation of the case studies where he leaves the reader wanting more. Here, Aliyev presents historical accounts and a plethora of secondary statistical data, including data from national representative surveys in all three countries. His empirical analysis, however, is based on limited elite interviews, reporting on elites’ perceptions of reform developments and effects. In addition to elites’ assessments of change, some anthropological observations of informal practices and institutions in these countries would have painted a richer, more nuanced picture of the change. That being said, the significant contribution and value of the book outweighs its few limitations, and future research can certainly pick up where this book leaves off.
The author’s assessment of the reforms’ impact on informal institutions is grounded in the following three criteria. First, Aliyev looks at the level of institutional distrust (which is characteristic of societies in the FSU) before and after the reforms’ implementation to assess “changes (if any) in the public perception of state institutions” (182). Second, the assessment includes gauging public perceptions and levels of satisfaction with the reforms (183). Worthy of particular note here is the finding that levels of institutional distrust and reform satisfaction do not correlate in the three case studies. In Georgia, for instance, trust in the government is relatively high and levels of satisfaction with reform process are relatively low, whereas in Ukraine, the picture is reversed: citizens are relatively satisfied with reform implementation, while levels of institutional trust are catastrophically low; Moldova rates low on both parameters. Third, and finally, Aliyev’s assessment of the efficacy of reforms on conquering informality comprises the analysis of the “[e]lites’ and the population’s reliance on informal institutions” (184). This is where the author relies solely on the elite interviews, whereas an anthropological observation could have offered a richer perspective.
One of the important arguments Aliyev makes in his book is that informality is not an inherently (and solely) negative phenomenon; moreover, it must be engaged in the process of democratizing reforms for them to be effective. Aliyev states: “Acknowledging the positive characteristics of informality might be instrumental to understanding the relationship between reforms and informality” (6, emphasis in original), and more instrumental still—in working to reduce the negative aspects of informality. The empirical realities in the FSU suggest that to overcome the aspects of informality that hinder democratization processes, reformers ought to work with them. Thus, Aliyev finds that “strengthening formal institutions can have both positive and negative effects on their informal counterparts,” and while alleviating the negative effects of informality (such as corruption and nepotism), reforms also can reinforce its positive properties (informal safety nets, social capital) that are essential in a developing context characterized by adverse economic conditions and weak state institutions. This brings up another important point: while political reforms can help tackle corruption and nepotism in the government, without addressing the root causes of poverty and economic inequality, the population’s reliance on informal practices aimed at survival will remain intact.
How can democratic reforms reduce informality? The following three sets of reform implementation factors are essential, Aliyev finds. First is the longevity and continuity of reforms: reforms take time and can experience setbacks (Ukraine’s post–Orange Revolution democratic reversals is an example), which can undo the work of previous reform efforts. Second is reforms’ scope and scale: the entire systems need to change for reforms to be successful, rather than one or two agencies. Third is elite and popular buy-in: for reforms to be optimally effective, both the elites and general population must support their implementation (although in certain conditions, he concedes, one of the two may suffice). These findings are useful not only for future empirical assessments of the reforms’ effects, but also for long-term policy planning. That being said, more research is needed on the causal relationship between reforms and informality, as the author admits in his conclusion: “The causal connections between the implementation of particular reform goals and their immediate (or long-term) effect upon informal institutions remain unclear” (193).
Informality is not only prevalent in the countries of the FSU, but, as Morris and Polese assert in their Informal Post-Socialist Economies: Embedded Practices and Livelihoods, it “is here to stay” (Jeremy Morris and Abel Polese, “Introduction: Informality—Enduring Practices, Entwined Livelihoods,” in Jeremy Morris and Abel Polese, eds., Informal Post-Socialist Economy: Embedded Practices and Livelihoods [New York, NY: Routledge, 2014], 1–18). Considering that even in developed countries, the informal economy constitutes roughly 20 percent of the gross domestic product (as compared to 60% in the developing contexts), informal practices will endure for the foreseeable future, and in the countries of the FSU they will continue to define the social, economic, and political landscapes. Aliyev concludes, “The experience of post-Soviet reforms shows that attempts to completely weed out all informal relations from formal institutions rarely succeed. Informality may withdraw or may cease dominating formal institutions, but the chances are low that informal institutions will completely disappear” (190). In fact, reform attempts rarely, if ever, set out to “completely weed out all informal relations,” but, rather, to reduce reliance on informal institutions to viable and productive levels. Moreover, the chances of informal institutions completely disappearing are close to none. Thus, rigorous research of informality, democratization, reform effectiveness, and the post-Soviet developments is particularly and persistently salient, and Aliyev makes an invaluable contribution to advancing it.
