Socio-Economic Inequality, Social Infrastructure, and Quality of Life in Central Asia: The Roles of Digital Infrastructure and Structural Transformation

Murat Smailov, Zokir Toshtemirovich Mamadiyarov, Isakov Janabay Yakipbaevich, Sherjon Sherjonov, Bakhodir Ergashevich Kurbonov, Kamola Kilicheva, Hudayberganov Dilshod Tuxtabaevich

2026

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DOI 10.3390/economies14080309
Data confidence 70 medium
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Abstract

This study investigates the long-run relationship between socio-economic inequality, public service provision, infrastructure development, structural transformation, and quality of life in Central Asia, focusing on Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan over the 2000–2024 period. Using panel data from the World Development Indicators, the analysis applies a comprehensive econometric strategy including panel unit root tests, Pedroni cointegration tests, FMOLS, DOLS, CCR estimators, and a Panel ARDL-PMG framework for robustness. The study examines how inequality, education and health expenditure, ICT development, electricity access, economic growth, and urbanization jointly shape quality-of-life outcomes measured by life expectancy. The empirical results confirm the existence of a stable long-run equilibrium relationship among the variables. Urbanization emerges as the most powerful determinant of quality of life, indicating a highly elastic welfare response to spatial structural transformation. ICT development and education expenditure consistently exert positive effects, highlighting the importance of digital connectivity and human capital accumulation in improving welfare outcomes. In contrast, health expenditure, electricity access, and economic growth display negative long-run relationships, suggesting that these variables often reflect structural inefficiencies, transitional dynamics, or non-inclusive growth patterns in the region. The Gini coefficient shows a positive association with quality of life, which is interpreted in the context of structural transformation and sectoral reallocation processes in transition economies. Robustness checks using Panel ARDL-PMG confirm both long-run equilibrium relationships and heterogeneous short-run dynamics, with evidence of adjustment processes toward equilibrium. The findings suggest that improvements in quality of life in Central Asia are driven primarily by structural transformation, digital development, and education investment rather than aggregate economic growth alone. The study contributes to the literature by providing a comprehensive multi-country panel analysis of Central Asia, integrating infrastructure, inequality, and structural change within a unified framework. The results offer important insights into the mechanisms through which development processes translate into welfare outcomes in transition economies.