Despite a common parentage for most of the 20 th century, Uzbekistan and Kazakhstan followed seemingly different paths in transition. Whereas Uzbekistan adopted a gradual and cautious approach to market reforms, Kazakhstan followed a more aggressive strategy. Yet, while Kazakhstan may have achieved a better policy environment today, its overall economic performance has not been better than Uzbekistan's. This paper examines the interplay between policies, institutions, and initial conditions, to

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... examine several competing and complementary hypotheses about why they may have led to different macroeconomic outcomes.