Informality, Business Environment, and Legal Reform in Weak Rule-of-Law Context

While contemporary scholarship on post-Soviet informality typically frames informal networks as either adaptive (survival) or parallel (subversive forces undermining formal governance) mechanisms, this ethnographic study demonstrates their dual nature as both. Focusing on Uzbekistan’s transitional context (2020–24), the article reveals how informal business networks construct hybrid governance by actively reshaping formal institutions through the influence of their cultural dispositions (collectively internalized informal ideological frameworks and normative practices). Employing a socio-legal perspective, the research examines the complex interplay between formal and informal institutions to better understand the dual functionality of informal business networks in the post-Soviet context. By combining top-down institutional analysis with a bottom-up ethnographic approach, the study shows how informal Uzbek business networks (categorized in the article as analytical ideal-types, termed Western-style, Islamic-style, and Soviet-style) simultaneously respond to state regulatory frameworks while developing their normative orders through everyday business practices. The study draws on Douglass North’s institutional theory and the theory of legal pluralism to analyze the abovementioned processes. The findings of this article offer new insights into state-society relations in post-communist contexts by redefining the “network state” as a dynamic interplay of formal and informal governance.