For decades, the drivers of economic growth seemed well established: investment, productivity, education, institutional quality and access to finance. Kazakhstan’s development strategies have largely been built around these variables. Yet that list is increasingly proving incomplete. One factor rarely appears in macroeconomic models, even though it can influence outcomes just as much as tax policy or the cost of capital. That factor is culture – the shared norms and beliefs that define what society considers acceptable behavior. For years, culture was treated as the domain of history, sociology or anthropology – anything but economics. In reality, it often determines how effectively every other reform performs.
Kazakhstan is an especially revealing case because, on paper, it has implemented much of what classical growth theory recommends. The government has expanded access to higher education, awarded a record number of scholarships, invested heavily in digitalization and trained workers for emerging industries. Yet the returns on those investments have been lower than a purely rational economic model would predict. According to the Bureau of National Statistics, the share of young people classified as NEET – those not in education, employment or training – fell from 7.3% in 2023 to 5.8% in the first quarter of 2026. The trend is encouraging. Even so, it still leaves hundreds of thousands of young Kazakhstanis with access to education outside the labor market, despite the opportunities the economy has formally created.
Traditional economic theory would explain this gap through institutional weaknesses or income levels. Those factors matter, but they are not the whole story. Between opportunity and individual action lies another layer: social norms, family expectations and widely held ideas about what is considered appropriate. This layer quietly reduces the effectiveness of almost every reform, even those backed by substantial public investment.
Ultimately, an economy is the sum of millions of individual decisions: whether to pursue higher education, search for a better job, relocate to another city, start a business or continue building a career after having children. Each decision is shaped by three forces at once – personal beliefs, financial incentives and the opinions of others. That third force remained largely absent from economic models for decades, even though in practice it can completely alter behavior. A higher salary may not persuade someone to change jobs if doing so invites family disapproval. Expanding women’s access to education does not automatically translate into higher labor force participation. Modern jobs may be available, but some people will not pursue them if prevailing social norms continue to discourage it.
Kazakhstan’s labor market illustrates this clearly. According to the Bureau of National Statistics, 942,500 people worked in the informal sector in 2025. That figure has fallen by 18.1% over the past three years, while the informal sector’s share of total employment declined from 12.8% to 10.1%. Yet 42% of those who remain in informal employment are self-employed in jobs only loosely connected to their formal qualifications. The government invested in developing human capital, but part of that investment is simply not being used – not because of a shortage of vacancies, but because people’s choices are shaped by more than market forces. This is where culture stops being an abstract concept and starts functioning as an economic institution. It determines the effective supply of labor, the pace of human capital accumulation and ultimately the level of productivity.
The same pattern is especially visible in female employment. Over recent decades, women’s access to education in Kazakhstan has expanded to the point where in many fields women now enroll at rates comparable to men. In theory, this should have become a powerful new source of economic growth. Yet surveys of young Kazakhstanis tell a different story. While 51% of women identify gender equality as an important issue, only 12.9% of men say the same. Both groups live in the same economy and enjoy the same educational opportunities, yet they differ in their basic perceptions of what constitutes socially acceptable behavior. As a result, they respond differently to identical economic incentives: the same job opening, the same salary or the same opportunity to acquire new qualifications.
The underlying reason is straightforward: economies evolve faster than societies. New industries and technologies can spread within a few years. Education systems can adapt relatively quickly as well. Social norms, however, change far more slowly – sometimes taking an entire generation. The result is a hidden gap between a country’s economic potential and its actual performance. Governments invest in human capital without fully utilizing it. Companies face labor shortages despite an apparent surplus of qualified workers. Families earn less than they could. The economy misses out on productivity that could already be driving growth. Kazakhstan’s NEET and informal employment figures illustrate precisely this pattern: opportunities exist, but they are not being fully used.
Perhaps the most surprising explanation for this gap is not widespread conservatism but widespread misperception. People consistently underestimate how much those around them actually agree with their own views. As a result, they continue following outdated behavioral patterns even when they are personally ready for change. Fresh evidence comes from a nationwide survey of 3,123 Kazakhstanis conducted in 2025 and published in Frontiers in Human Dynamics under the title “Consensus without Convergence.” The study found remarkably high agreement on core values: 95.5% identified health as a priority, 93.6% emphasized responsibility and 91.9% highlighted integrity. Overall, 81.5% believed Kazakh society shares a common system of values. Yet the very same respondents perceived society as deeply divided: 79.4% saw a major gap between government officials and ordinary citizens, while 75.1% believed there was a deep divide between rich and poor.
The paradox is striking. Society is far more united in its underlying values than its members believe. Individuals systematically underestimate the degree of agreement around them and continue behaving as though they are surrounded by far more disagreement than actually exists. Economists describe such moments as tipping points. For years, society appears unchanged, until accumulated shifts in attitudes suddenly become visible and changes once considered impossible unfold within only a few years.
The policy implications are significant. Financial incentives are less effective than reformers often expect when they clash with deeply rooted social expectations. Raising wages or creating new jobs may not be enough if individuals believe that accepting those opportunities would violate accepted social norms. In such cases, economic rationality competes with social rationality – and does not always win. This helps explain why many reforms in Kazakhstan and elsewhere have delivered weaker results than policymakers anticipated. The opportunities exist, but society has not yet fully adapted to them.
The reverse process is just as important. Once enough people begin behaving differently, social norms themselves start to shift. Economists long viewed culture as something almost fixed, changing only over decades. Yet culture can evolve much faster when living conditions, expectations and economic incentives change simultaneously. Three channels drive that process. The first is education, which transmits not only knowledge but also ideas about what life paths are considered normal. The second is the media, which introduce new models of careers and family life. In Kazakhstan, this influence is particularly strong: 92.9% of the population uses the internet, while 75.7% – or roughly 15.7 million people – are active on social media, creating one of Central Asia’s most digitally connected societies where new behavioral norms quickly become visible. The third channel consists of programs that expand people’s ability to shape their own future. The government’s Bastau Business initiative is a good example. It offers free entrepreneurship training for young people, including those in the NEET category, as well as residents of rural areas and small towns, followed by grants of up to 400 monthly calculation indices (MCIs) to launch a business. According to the program, it has already helped create around 60,000 jobs, directly addressing the same gap where the state has struggled to fully realize returns on its investment in human capital.
Culture rarely changes overnight. More often, societies pass through intermediate stages that allow adaptation without provoking internal conflict. A new behavior first appears as an exception, then becomes an acceptable alternative and eventually turns into the norm. Kazakhstan’s growing youth entrepreneurship reflects exactly this process. Today, more than 40% of newly established businesses are launched by people aged 18 to 30. In the Turkistan and East Kazakhstan regions, the number of young entrepreneurs has risen by 18% over the past three years. A decade ago, starting a business at that age was widely viewed as a risky exception. Today, it has become increasingly mainstream. This is what cultural change looks like in practice, and it is precisely the transition programs such as Bastau Business are designed to accelerate.
These dynamics matter especially now, as Kazakhstan’s economy is undergoing rapid structural change. Modern services account for a growing share of economic activity. Digitalization continues to accelerate. Demand for highly skilled professionals is rising, while entirely new occupations are emerging that barely existed a few years ago. Yet every structural transformation requires corresponding shifts in social expectations. If the labor market evolves faster than established patterns of behavior, part of the country’s human capital will inevitably remain underutilized. Young people will continue choosing careers based on family expectations rather than economic opportunity. The country will forfeit one of its most valuable assets: the ability to deploy its own talent quickly and efficiently.
In that sense, culture becomes just as essential to economic infrastructure as roads, energy systems or financial markets. It cannot be measured in kilometers or billions of tenge. Yet it determines how effectively every other part of the economy functions. Culture does not replace reform – it defines the limits of what reform can achieve. Governments can invest more in education, build infrastructure, attract investors and develop entirely new industries. But if social norms continue limiting the use of human capital, part of that potential will inevitably remain unrealized.
For Kazakhstan, which has declared its ambition to move from a resource-based economy toward a knowledge economy, this is far from an abstract debate. Future growth will depend less on how much the country extracts from the ground and increasingly on the quality of its human capital, the strength of entrepreneurship and the speed with which society embraces the opportunities already available. The competition of the next decade will not be fought only between technologies or companies. It will also be a competition between societies that differ in how quickly they adapt to change.
In that respect, the Consensus without Convergence survey offers an unexpectedly practical lesson for Kazakhstan’s economic policy. Society already shares common values to a far greater extent than people themselves realize. The challenge is not persuading Kazakhstanis to embrace new norms. In many cases, they already have. The real challenge is helping people understand that they are not alone in holding those views. Sometimes the least expensive economic reform is simply providing accurate information about what the majority already believes.
Elvira Baturova, EconomyKZ Research Group, exclusively for EconomyKZ.org
