During the "socialist period, webs of personal relationships were really the principle currency in society… informal social networks were the most important mechanisms for getting things done, obtaining access to goods and services, and attaining and acquiring accurate information about events," remarked Kathleen Kuehnast, Research Associate, Institute for European, Russian, and Eurasian Studies, The George Washington University, at a Kennan Institute lecture on 6 June 2002. Kuehnast and Nora Dudwick, Senior Social Scientist at the World Bank in Washington D.C., presented the findings from their World Bank-funded research on the evolution of informal social networks in the Kyrgyz Republic. Dudwick explained that in looking at past studies one thing that struck researchers was that, "social support networks, including kinship networks, and extended families seem to be crumbling among the very poor that we studied, and of course when they need them most."
Using a popular Soviet (and pre-Soviet) proverb, "Better a hundred friends than a hundred rubles," as the title for their study, Kuehnast and Dudwick focused their research on what was happening to informal networks in the Kyrgyz Republic. Noting several reasons for choosing the small Central Asian republic, Kuehnast stated that, "the history of informal kinship or neighborhood-based social networks has played a role for hundreds and hundreds of years in Kyrgyz society." The researchers defined informal networks as "systems of relationships through which goods, services of all kinds or money are transacted." Dudwick noted that the study examined networks from a number of angles, including the basis of the relationship, what kind of goods or services people transacted through them, and how the patterns of transaction were changing.
The study demonstrated that informal networks remain integral to everyday life in the Kyrgyz Republic, nevertheless the size of social networks and the frequency of social encounters had strikingly decreased among poor people, especially in rural areas. One more disturbing finding showed that not only have many of the "non-poor" adopted more individualistic values, they are increasingly reluctant to help impoverished relatives. In addition, the study found that formal institutions in the Kyrgyz Republic are "on the verge of collapse while corruption is endemic." Dudwick further stated that blat, or "pull," combined with bribery, are often essential for accessing public services, receiving useful information, or finding employment.
Informal social networks, Kuehnast explained, were not only a response to the inadequacies of formal institutions in the FSU. In Central Asia, these networks emerged from traditional kinship ties that proved to be exceptionally strong. Prior to Sovietization, tribal and clan relations constituted the basis of economic and political collective well-being in Central Asia. No individual could survive without the protective mantle of tightly woven networks of extended relatives who lived across the once nomadic territory. Such social networks were and still are reaffirmed through elaborate and expensive ceremonial events, marking the occasions of births, marriages, or funerals. In many cases, these events "are a form of currency in which families are judged." Many families travel great distances to celebrate family or social occasions, because their attendance is "essential to maintaining social status." However the expense of attending such events, combined with the social norms of elaborate gift giving have forced many into debt. The survey showed that frequent borrowing and indebtedness have ruptured relationships among the poor. And, because many transactions are asymmetrical, the poor have often been forced to pay back monetary loans in the form of labor.
Kuehnast and Dudwick observed that the conclusions from their study, "contradict the underlying assumption in development circles that the poor always have their families as an ultimate safety net." Extended family networks have deteriorated, while unemployment and migration have further weakened neighborhood networks, especially in rural regions. Kuehnast pointed out that the non-poor have distanced themselves their kin-based networks, shedding many of their obligations to poorer family members and have formed interest-based networks that spread throughout the entire region. Dudwick noted that "social capital," or social relationships that provide access to valued resources, have also diminished. "The poor do not have contacts and if they do have contacts, friends or neighbors who are willing to help, the latter tend to be just as poor," Dudwick stated.
Kuehnast and Dudwick concluded by offering several policy recommendations for international development institutions. Development projects must take into account the important role of hierarchical, often patron-client relationships, and address the important role of the rural elite, who are often gatekeepers of information and opportunities In addition, incentives for the non-poor to support the enhancement of opportunities for the poor need to be considered. They also encouraged projects that involve the improvement of communications and transportation infrastructure, which would give the poor a greater possibility of maintaining their social networks." Finally, the researchers stressed the importance of developing projects that build upon indigenous traditions, such as savings clubs and traditions of mutual assistance.