Abstract
The predicted infrastructure deficit of US$84 billion in Kazakhstan by 2040 can be substantially mitigated through the execution of public-private partnership (PPP) initiatives and the attraction of investments from alternative sources, such as Islamic finance. Islamic finance has significant potential to bridge this gap but faces institutional barriers to mobilizing it. This study examines the institutional conditions affecting the mobilization of Islamic finance for infrastructure PPPs in Kazakhstan. Directed qualitative content analysis of institutional documents is guided by Douglass North’s distinction between formal rules, informal constraints, and enforcement. The analysis combines legislation, regulatory materials, and published market evidence with two illustrative cases, the BAKAD road and Kokshetau Hospital. The study finds that Kazakhstan’s challenge hindering the effective mobilization of Islamic finance for infrastructure PPPs is not only to expand the existing fragmented regulatory framework for Islamic finance but also to realign formal institutions with deep-rooted social informal norms and regulate enforcement mechanisms. This study makes a unique contribution by examining the mobilization of Islamic finance within PPP frameworks in Kazakhstan, a topic the existing literature typically analyzes separately. Its originality lies in comprehensive institutional analysis, which encompasses both theoretical and practical discussions on informal and enforcement barriers to mobilizing Islamic finance resources that are not obvious.