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ISET Economist Blog

A blog about economics in the South Caucasus by ISET
Dec
19

What Chile teaches Georgia

In 1991, the former finance minister of Chile, Alejandro Foxley, said in an interview: “We may not like the government that came before us. But they did many things right. We have inherited an economy that is an asset.” About twenty years before, General Augusto Pinochet had toppled the democratically elected President of Chile, Salvador Allende. Pinochet’s rule from 1973 to 1990 was characterized by severe violations of human rights, yet finally he agreed to hold a referendum on his political future, and when the Chilean people voted against him, he ste...
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Florian Biermann
The Chilean experience is mainly relevant for Georgia because of the way the Chileans dealt with the legacy of an evil regime. The... Read More
Sunday, 25 December 2016 8:08 PM
Eric Livny
Why do we need a bloody and corrupt dictator to teach us the virtues of liberalizing Georgia’s foreign trade or not meddling with ... Read More
Tuesday, 20 December 2016 3:03 PM
Florian Biermann
Of course, it is a highly ideological topic and there is no proof that the Chicago Boys account for Chiles favorable economic situ... Read More
Sunday, 25 December 2016 8:08 PM
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Dec
10

Georgia Needs Compact Government!

In recent years, a tendency on the part of different authorities to consolidate has been noted worldwide. Competition agencies are merging with consumer protection agencies and/or regulators in order to establish more effective and less expensive public systems. Accordingly, since the first roundtable meeting on the optimal design of a competition agency, held in February 2003, OECD has organized two more roundtables concerning changes in institutional design of competition authorities in less than one year – one in December 2014, and one in June 2015. A...
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Nov
23

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 oth...
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Mar
06

What Can We Do about the Lari Depreciation?

  Unlike most commodities that are provided by private actors competing with each other, a currency is provided by a monopolist. The only institution that is allowed to produce laris is the National Bank of Georgia (NBG). The task of the NBG-monopolist is made difficult by various peculiarities that cannot be found in other markets. First of all, lari once injected into the economy are not consumed or used up. They remain in the economy “until the cows come home”, as they say in Scotland. This is starkly different to what we observe in most other ma...
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Guest — Giorgi Bakradze
My reply should have got here, sorry
Friday, 06 March 2015 10:10 PM
Guest — megiddo02
True, of course you could question the validity of the assumptions I make. But just saying there is no data available does not inv... Read More
Friday, 06 March 2015 11:11 PM
Guest — Giorgi Bakradze
One can make assumptions based on existence of Russell's teapot. That wouldn't make these assumptions valid.
Friday, 06 March 2015 11:11 PM
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Mar
04

Lari Depreciation: Is a Financial Crisis on the Horizon?

The recent bouts of sharp lari depreciation caused much anxiety among the Georgian population, prompting fears of inflation, loan defaults, and bank failures, on the one hand, and the typically Georgian political speculations over “who is to blame”, on the other. In and of itself, a moderate lari depreciation is not necessarily a bad thing for the Georgian economy. It makes Georgia cheaper and more competitive relative to the rest of the world, reducing the current account deficit and carrying a promise of future investment and jobs. That said, a deep an...
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Feb
13

Harmonize, but do not Harm!

The “do no harm” (primum non nocere) principle is well known to students of medical schools. It is one of the most fundamental maxims in medicine, as formulated, for example, in the Epidemics book of the Hippocratic Collection: “The physician must ... have two special objects in view with regard to disease, namely, to do good or to do no harm". Doctors are taught that medical interventions are not risk-free. Thus, when facing a “problem” one should consider whether to use a particular procedure (e.g. surgery or chemical treatment) or do NOTHING. Not surp...
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Guest — Miranda
Great and "to the point" article! Concerning the topic itself, I just wonder how quickly Doing Business indicator will worsen for... Read More
Friday, 13 February 2015 2:02 PM
Guest — Eric Livny
Thank you, Fady! It was my pleasure to contribute to the ongoing debate. I hope I did no harm :-)
Monday, 16 February 2015 12:12 PM
Guest — Fady Asly (@fadyasly)
Fantastically well written piece! Thanks Eric.
Saturday, 14 February 2015 1:01 PM
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