ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Jun
30

Georgian Nepotism

In Georgia, employment is often found not through prevailing in fair, orderly selection processes, but through personal connections. This is a well-known fact almost nobody denies. It is evident in almost every Georgian firm and institution. In a hospital you encounter a “nurse” not capable of the most basic medical accomplishments, in one of Tbilisi’s universities you meet a “cleaning woman” who is mentally ill, known for scaring everybody through aggressive and inappropriate behavior, and in the railway station you buy a ticket from a clerk who knows n...
Rate this blog entry:
Continue reading
2828
6 Comments
Write a Comment
Apr
18

On Women and Money

One of the few economists who won the Nobel Peace Prize is Muhammad Yunus, a Bangladeshi who invented the concept of microcredits. What is it about? Usually, it is very difficult for poor people to receive credits from banks. Their creditworthiness is considered low, as they have no collateral and little resources to make up for possible losses. Yunus believed, however, that poor people have good business ideas, and he did not doubt their seriousness to pay back the money. In the late 1970’s, he visited the poorest families in a Bangladeshi village calle...
Tags:
Rate this blog entry:
Continue reading
2098
0 Comments
Write a Comment
Mar
10

Are Georgians Too Impatient?

Assume you have lent your brother 1000 laris, and because he is a close family member, you do not charge interest from him. One day you get a phone call from your brother, and he offers you to pay back the debt either today or in one year from now. What would you choose? If you act in line with standard economic theory, you would choose to get the money back today. You are driven by what economists call time preference, a kind of “psychological interest rate” with which you discount future payoffs. There are a couple of reasons why it makes sense for hum...
Rate this blog entry:
Continue reading
5060
5 Comments
Write a Comment
Jan
17

No Smart Farmers in Georgia

When I think about the lack of human capital in Georgian agriculture, I am reminded of the 1997 Georgian movie “The Turtle Doves of Paradise”, directed by Goderdzi Chokheli. In a Soviet village, an ex-priest decides to teach basic knowledge to old peasants. He wants them to learn to read, write, and elementary calculations skills. The movie addresses a problem that, fortunately, has been completely eradicated in the last decades. Nowadays, virtually all people living in Georgian villages are able to read and write (and probably also to multiply, subtract...
Rate this blog entry:
Continue reading
2659
4 Comments
Write a Comment
Nov
15

Troubles to Cooperate in Georgian Agriculture

Georgian agriculture was more developed in Soviet times as it is today. Despite great overall technological progress almost everywhere in the last 20 years, Georgia moved backward when it comes to agriculture. In the year 1990, at the end of the Soviet Union, the number of cattle exceeded 4 million, while today it is just a little more than 1 million. In the Soviet Union, Georgia was a main producer of tea, citrus fruits, deciduous trees, and vine. According to the Rural Poverty Portal, after the collapse of the Soviet Union the output of some of these g...
Rate this blog entry:
Continue reading
2249
2 Comments
Write a Comment
Sep
30

Dear Police: There is a Bomb. Please Find It!

Evacuation is one of the most frequently used words in Georgian TV in the last two weeks, arguably due to an inflation of fibber bomb warnings. Rustavi 2, Imedi, Parliament, airport, bank offices, and schools – all were targeted by these macabre hoaxes. In the Georgian fairy tale of Liar Shepherd, the young boy lied twice that wolfs were coming. When finally wolfs were really coming, no one believed him anymore. This is one of the main risks of bomb hoaxes – they may lead to something one might call “terrorism fatigue”. Recently, I spoke with somebody wh...
Rate this blog entry:
Continue reading
2409
2 Comments
Write a Comment

Our Partners