Transformation of The Institutional Framework for Cluster Development in Uzbekistan: From a Directive Model to Market Principles

This article examines the institutional transformation of cluster development in Uzbekistan over the period 2017–2024, with a focus on the transition from a directive, state-initiated model toward market-based principles of cluster formation and growth. Building on the main theoretical traditions of cluster studies (agglomeration theory, Porter’s competitiveness paradigm, New Economic Geography, evolutionary and network approaches), the paper develops a unified analytical understanding of clusters as meso-level systems that combine firms and complementary institutions (research and educational organizations, public bodies, facilitators, and SMEs) within an integrated value-creation framework. From a methodological perspective, it uses systemic and regulatory analysis and supplements it with a SWOT/TOWS logic to derive major institutional strengths, weaknesses, opportunities, and threat profiles relative to Uzbekistan cluster policy. The results imply that the large-scale state patronage that propelled cluster expansion and infrastructure development is also forging institutional pitfalls, such as lopsided sectoral governing regimes, poor stand-alone facilitation, lack of performance assessment, and entrenchment of the one-cluster–one-firm trajectory that may limit rivalry, entry, and capacity upgrading. The paper advocates for an integrated “Cluster” and “Cluster Policy” system and a transition to more rules-based, results-oriented governance to increase institutional cohesion, minimize spontaneously develop practices and ultimately enhance cluster effectiveness and competitiveness through transparent incentives and measurable outcomes.