Institutional, economic, and social determinants of income inequality in Kazakhstan

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Type of the article: Research ArticleAbstractIncome inequality remains a key socio-economic challenge in Kazakhstan, where persistent disparities reflect institutional weaknesses, structural imbalances, and limited effectiveness of redistribution mechanisms. This study aims to assess the influence of institutional quality, economic structure, and social policy on income inequality in Kazakhstan. The analysis is based on annual national and international statistical data for 2001–2023, covering indicators of governance quality, investment activity, labor market dynamics, and social protection. Methodologically, the study uses Spearman’s rank correlation analysis to identify statistically significant associations between the Gini coefficient and selected explanatory variables, without assuming linear relationships. The robustness of results is verified through significance testing at multiple confidence levels. The findings indicate that stricter rule of law and lower corruption are associated with reduced inequality (Spearman’s ρ ≈ –0.44 to –0.50, p < 0.05), while a higher share of state-owned enterprises correlates with greater disparities (ρ ≈ +0.47, p < 0.05). Investment per capita and household expenditures exert a moderate equalizing effect (each ρ ≈ –0.47, p < 0.05), whereas growth in real incomes and an expanding manufacturing sector are linked to wider gaps. Manufacturing share shows a strong positive association with inequality (ρ ≈ +0.80, p < 0.001), and overall income growth correlates positively as well (ρ ≈ +0.72, p < 0.001). Social transfers and pensions operate primarily as reactive measures, smoothing short-term fluctuations rather than achieving sustained redistribution. The findings provide guidance for public policy aimed at reducing income inequality and indicate that the strongest equalizing effects are associated with improvements in the rule of law, reductions in corruption, and higher investment activity, while growth in real household incomes and existing social transfers are largely reactive and do not ensure sustained redistribution.AcknowledgmentThis paper was prepared within the framework of the scientific and technical program IRN BR28713593 “Sustainable development of Kazakhstan’s economy in the context of new challenges: foresight, strategies and scenarios of modernization, institutions.”