INFRASTRUCTURE IN CRISIS: ASSESSING WATER SERVICE CHALLENGES IN POST-SOVIET VS. NON-POST SOVIET REGIONS OF EASTERN EUROPE AND CENTRAL ASIA

This paper analyzes the effects of the 2008–2009 global financial crisis on infrastructure challenges in Eastern Europe and Central Asia, with a focus on comparing post-Soviet and non-post-Soviet firms. We find that declining business formation rates led to fewer applications for new water connections among service sector firms in both groups, and among manufacturers in non-post-Soviet countries. In contrast, applications remained stable for manufacturers in post-Soviet countries, reflecting a steadier rate of business formation in this sector. However, when examining the number of manufacturers reporting water supply issues, the frequency of incidents, and their duration during the crisis, post-Soviet firms were more adversely affected than their counterparts elsewhere. These indicators all worsened during the crisis compared to the post-crisis period in post-Soviet countries. To mitigate such infrastructure vulnerabilities during future global economic or financial crises, firms and policymakers in post-Soviet countries should pursue a proactive and resilient strategy focused on financial diversification, stronger institutions, and long-term infrastructure planning.