Georgia’s growth performance since independence has gone through extremes, from an unprecedented -44.9 percent in 1992 to 12.3 percent in 2007. Although growth rates temporarily fell in the aftermath of the Russian-Georgian war and the world financial crisis they have since then recovered to 7 percent in 2011

A recent paper by Dani Rodrik has an interesting observation about Georgia. The paper itself estimates the productivity growth rates of manufacturing firms, based on a UNIDO dataset covering 72 countries.

ISET-PI played a relatively minor role in this project, supporting a consortium consisting of Ecorys (Netherlands) and CASE (Poland). The study was commissioned by the European Commission (DG Trade). The Georgian component of the study identified considerable compliance costs related to the EU-required phyto and veterinary controls, reflected in higher prices for meat and meat products, and an increase in EU meat exports to Georgia. These findings were reported to the Georgian Prime Minister’s office and to the consortium members.

Growth Diagnostics project applies the well-known methodological framework to uncover the binding constraints to economic growth in Georgia. The aim of this research project was to analyze all potential areas of economic reform in Georgia from credit markets to human capital to infrastructure; and thus produce a comprehensive assessment of reform priorities.