Evaluation of the Effectiveness of Government Financial Incentives for Entrepreneurship

The article assesses how effective the system of state financial incentives for entrepreneurship in Uzbekistan has been since the creation of the State Fund for Support of Entrepreneurial Activity in 2017. The study combines two blocks of evidence. The first is the leverage of the Fund's instruments (interest compensation and partial credit guarantees), calculated from official reporting of the Ministry of Economy and Finance and of the Entrepreneurship Development Company. The second is an outcome analysis of official statistics for 2015 to 2025, covering the share of small business in GDP, employment, industrial output and exports at national level and for fourteen territories. Every soum of public support was accompanied by about 4.4 to 4.7 units of bank credit, and interest compensation alone mobilised roughly 8 units of credit per unit of budget cost. At the same time, the relative productivity of small business (the ratio of its GDP share to its employment share) fell from 0.864 in 2017 to 0.697 in 2025, while regional dispersion of the GDP share widened. The export share of small business, by contrast, rose from 20.0% in 2021 to 36.6% in 2025. The results suggest that the incentives have been effective in keeping credit flowing and in preserving jobs, but have not yet raised the productivity of the sector. The author proposes moving from volume targets to performance-linked support, systematic counterfactual evaluation and publication of beneficiary-level data.