Оptimization of рublic capital allocation for economic diversification of Kazakhstan under budgetary constraints

As Kazakhstan’s fiscal space narrows, the sectoral structure of public capital allocation becomes critical. This study constructs and solves a network optimization model using Kazakhstan’s official data to allocate limited state capital across sectors, maximizing economic diversification under budget constraints. The methodology integrates input-output analysis, production network analysis, and constrained optimization. The empirical basis comprises Kazakhstan’s 2020–2023 symmetric input-output tables, used to calculate output multipliers, Rasmussen linkages, and centrality indicators for 68 product types aggregated into broad sectors. Diversification is operationalized via the Herfindahl-Hirschman Index of export concentration. The optimization model incorporates diminishing marginal returns, where sector shares in a fixed budget are decision variables, and sector contributions are determined by export-adjusted weights. Calculations show that trade, business services, and metallurgy possess the greatest network leverage, while transportation occupies a middle position; meanwhile, the high centrality of resource sectors does not imply a contribution to diversification. The model’s solution systematically diverges from the actual investment structure: the extractive sector is overinvested relative to its diversification impact, while several non-extractive sectors remain underfunded. The scientific novelty lies in deriving sectoral priorities not qualitatively, but as the solution to a formalized optimization model based on measurable, reproducible network parameters.

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