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A blog about economics in the South Caucasus.

Georgia’s Ravaging Nepotism

Georgian media is full of stories about nepotism and the funny justifications of those involved: When Irakli Garibashvili, still being Minister of the Interior, was confronted with nepotism allegations, he replied: “Don’t you know that a relative of your wife is not your relative?”

When the 23-year-old brother of Vice Prime Minister Kakhi Kaladze’s wife was appointed head of the City Hall’s department for education, sports, and youth affairs, Tbilisi Mayor Davit Narmania stated that he had “known him for a long time and did not consider any other alternative” as he knew “his active drive and attitudes towards youth politics and sports.”

In the Khulo municipality in Adjara, an official who had provided her daughter with a job clarified: “Yes, she is my daughter but not a member of my family, because she is married […] and she is now a member of another family.”

To counter the suspicion that nepotism might be going on, recently Georgian Dream Member of Parliament (MP) Gogi Topadze set the record straight: “Georgia is a small country, and making a big fuss that somebody appointed a cousin or relative does not mean that it is nepotism. […] Georgia is a small country, there is always a relative, a neighbor, or somebody, and this topic does not need to be sensationalized.”

Gogi Topadze certainly has a point. Georgia is a small country and seemingly nepotistic appointments may be the result of a rigorous and meritocratic selection process. Yet, this is not reason enough to completely dismiss nepotism in the public sector as “help among friends”, since it is extremely detrimental to a country’s development:

Firstly, if hiring decisions are nepotistic, people who lack competence will be assigned offices, reducing the government’s efficiency and effectiveness. In Georgia, there is evidence of unqualified government employees at all hierarchy levels, and a good deal of this may be explained by nepotism. 

Secondly, and related to the first point, young Georgians will get the impression that qualification and hard work do not really matter in their careers. If success is primarily determined through networking, incentives to invest in human capital are diminished. All the efforts to improve the educational sector will be futile if, in the end, the most qualified people do not get the jobs. 

Thirdly, nepotism leads to dependencies and power structures within organizations that should not be there. The willingness to report misconduct by a colleague is reduced if one is personally indebted to that colleague. Even worse, if a citizen has a dispute with a government official, such dependencies may make a fair and impartial review by other officials impossible. It is also difficult to reject questionable wishes from colleagues with whom one has personal alliances, e.g. reject requests to make exceptions of rules.


FIGHTING CORRUPTION WITH NEPOTISM

As the above examples show, there is a lack of awareness for the problem of nepotism in Georgia. This is in stark contrast to “standard” corruption, which, in our experience, most Georgians strongly despise. Interestingly, this peculiar combination of aversion against standard corruption and tolerance for nepotism may be embedded in Georgia’s recent reform history. 

In 2003, Georgia ranked 124th in Transparency International’s Corruption Perceptions Index (CPI) whereas in 2014 it ranked 50th. Most observers attribute this improvement in the CPI exclusively to an eradication of so-called “petty corruption”, i.e. nuisances like bribing policemen and minor government officials, while political or “grand” corruption was not eliminated. 

In the wake of the Rose Revolution, a large portion of state officials were fired, thereby destroying their patrimonial structures of bribe collection and influence buying. However, this transition could not have been done without its own corrupt practices: new high-ranking officials were selected based on personal loyalty considerations so as to ensure United National Movement’s (UNM) political survival and achievement of its goals. And since personal friends and relatives were considered loyal, what followed was a wave of nepotistic appointments.

Putting it simple, UNM fought corruption with nepotism, but was it such a smart strategy in the long run? 

It seems that the decision to rely on nepotistic networks contained the seeds of UNM’s fall from grace and political defeat. By 2007, those people affiliated with the ruling party formed closed power circles, in which they distributed a considerable share of Georgia’s economic resources (a form of “grand corruption”). Largely out of touch with people who were not part of their networks, the ruling group became more and more encapsulated, not recognizing that public support for their government was crumbling, and finally they were replaced by the Georgian Dream. 

For the progress of Georgia, it is crucial that the plight of nepotism will be addressed. But how?


SYSTEMIC INTEGRITY

Nepotism in hiring, like other forms of corruption, is a systemic problem and does not result from a deficit in individual moral standards. It is not the case that in countries which are heavily infected by corruption, like Greece, people have “fraudulent” or “rotten” attitudes. Once corruptive practices have become the norm, no individual can retain their integrity without incurring excessive cost. To move out of such an unfavorable equilibrium, the government has to set incentives which override the natural selfish behavior. With regard to ordinary corruption, this was done by UNM very effectively through various measures that made it risky and dangerous to accept or pay bribes. Similar measures are available in the fight against nepotism. 

First of all, the Georgian government and public companies should take greater steps to formalize their hiring process and make use of “blind” technological procedures. The United States’ government maintains a large jobs website USAjobs.gov where any citizen can make a profile and enter their skills in a database. Candidates that meet the technical requirements have their CVs automatically forwarded to hiring managers. This website was how our American author, Charles, was hired as an analyst at the Department of Defense without knowing anyone in the Pentagon beforehand. Such a system could even be designed in a way such that the name of the applicant is not revealed to the reviewer.

Secondly, it should be impossible for anyone to get a job by simple appointment of a politician or senior official. 

Thirdly, as part of the application process candidates should be required to disclose information about relatives and personal acquaintances who are already working for the government. With some international employers, such as the International Monetary Fund, the existence of such connections would be an obstacle for employment, but this might an excessive requirement for Georgia. As Gogi Topadze said, Georgia is a small country, and the government may be too important an employer to apply such strict rules. Still, Georgia could at least set up an independent committee to review these connections once somebody is selected for hiring. Based on objective (meritocratic) criteria, such a committee could decide whether there is reason to believe that personal acquaintances played a role in the hiring decision. The US government, the UN, and the World Bank all have laudable hiring models to be consulted in the process of redesigning Georgia’s hiring processes.

Finally, to avoid other forms of nepotism which are not related to hiring, the Georgia’s civil society and general public should play a larger role in the fight against nepotism, organizing transparency campaigns, properly reporting information on nepotistic practices, and making sure that the individuals responsible are voted out of office. 

Widespread nepotism is arguably one of the major obstacles for Georgia’s economic progress and its continued Euro-Atlantic integration. Indeed, for Georgia to unlock the potential embedded in the recently signed Association Agreement with the EU, the problem of nepotism has to be addressed at all levels of the Georgian society. A good first step might be to recognize the nepotism is, indeed, a problem.

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Tuesday, 20 August 2019

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