Abstract:
This paper analyzes the development of Azerbaijan’s economic growth model from a
political economy perspective, focusing on the role of state institutions, oil revenues,
and elite strategies. It tests the argument that the current model of the country is more
accurately described as a hybrid of administrative Keynesianism and state capitalism.
Six key phases of economic and political development are covered from the initial postSoviet years to the post-Covid period. Relying on macroeconomic data, institutional
reports, and sectoral trends, the study reveals that growth is primarily state-driven and
heavily reliant on hydrocarbon exports. Despite developed policy initiatives aimed at
diversification, structural dependence and limited private sector capacity persist. The
findings suggest that without right institutional reform, Azerbaijan’s development path
will remain vulnerable to external shocks and dependent on government redistribution.