ISET

ISET Economist Blog

A blog about economics in the South Caucasus.

A graduate of the Hebrew University in Jerusalem, Eric Livny has been living and working in Georgia since April 2007. Mr. Livny was the founding director and president of the International School of Economics at TSU (ISET) and the affiliated ISET Policy Institute over a decade, through July 2018. Prior to that, Eric held leading positions with the Moscow-based New Economic School (which he helped establish in 1992), and the Economics Education and Research Consortium. In 2000-2007, Mr. Livny served as the CIS representative of the Global Development Network (GDN), and led the GDN Bridging Research and Policy Project.
Eric’s policy research and consulting activities span a wide range of issues such as foreign direct investment (FDI), trade and national competitiveness, public private partnerships (PPPs) for economic development, inclusive growth, rural development and agricultural cooperation, economics of education, migration and labor markets, transport and economic geography.
Passionate about blogging and social media, Eric serves as editor-in-chief of, and is a frequent contributor to, the ISET Economist Blog, which he created together with other ISET faculty in 2011. Additionally, he is a columnist with Georgia Today, The Financial, and the Georgian Journal.
Eric was born in St.Petersburg (Russia) but grew up in Israel, where his family emigrated in 1977. He is married to Anna Sekowska Livny, and is the father of Katya, Jan, Natalie and Tal. Eric is fluent in English, Russian, and Hebrew. His Georgian language skills are fast improving.

Jul
14

Common Language, Education, and Nation Building

(Translation by Elene Grdzelidze) Back in the middle of the 19th century, Georgia was much more fragmented and unequal than today. It was a society consisting of a huge mass of illiterate peasants (mostly serfs working the lands of their lords and the church), a sliver of urban population (large parts of which, particularly in Tbilisi, were not ethnically Georgian), and a relatively large proportion (up to 5%) of nobility, organized according to a rigid hierarchical system and controlling much of the country’s land. The beginning of Georgia’s national re...
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Jun
27

The Roots of Education are Bitter... is its Fruit all that Sweet?

In his famous “Advice to Scholars”, David Guramishvili wrote (translation by Venera Urushadze): If you seek happiness and good, First taste the bitterness of gall, For bitter roots yield sweetest fruits, And honest labour blesses all. Guramishvili is a passionate advocate of learning not as a means of getting a better job or achieving any other pragmatic objective. For him, the fruit of education is sweet because “wisdom to the wise brings calm and makes him master of his lot”. Learning is thus seen a goal in and of itself. Judging by today’s r...
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Jun
13

The Economics of Prostitution

When thinking of “market distortions” we typically imagine government regulations, taxes and subsidies that prevent market mechanisms from achieving an optimal outcome. For example, if you pay $100 for a 30-minute taxi ride (as is the case in many European capitals), you can easily relate it to a government regulation requiring all taxi drivers to be licensed (at a very high cost). In the absence of such a requirement many more drivers would be able to enter the taxi driving profession, increasing supply and reducing prices. However, the government is no...
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Jun
06

Georgia Caught Between the Russian Rock and the EU Hard Place

“I’m Georgian, and therefore I am European.” These were the words late Georgian Prime Minister Zurab Zhvania chose to express Georgia’s EU aspirations when speaking in front of the Council of Europe in 1999. Reading very much like Martin Luther King’s “I have a dream”, Zhvania’s dramatic statement conveyed twin desires: i) to join the European family of nations and ii) to break out of Russia’s traditional sphere of influence, its political, economic, and cultural domination of Georgia since early 19th century. On June 27, the European Union plans to sign...
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May
30

Farmer Groups: Why We Love Them and When They are Successful

There are many reasons to love the concept of farmer cooperation (and cooperation more generally). To begin with, there is a great aesthetic value in seeing people coming together, sharing resources and helping each other. After all, instinctive collectivism was the basic condition of human existence from time immemorial. But, there are also powerful economic reasons for farmer cooperation. Smallholders are often too small to independently access markets, and can be easily exploited by middlemen and local monopolies. Service cooperatives can increas...
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Apr
25

Georgian Churchkhelas: Thinking Out of the Traditional Box

These are Georgian churchkhelas, a kind of national candy made from a string of walnut halves dipped in grape juice thickened with flour (Tatara or Phelamushi), and dried in the sun. There are essentially 2-3 kinds of Churchkhela. Somebody may be better in making them, somebody worse, but all in all, it is the same stuff sold all over Georgia. These are the Turkish analogs. If you have been to Istanbul’s Spice Bazaar, you will know firsthand that there is a much greater variety – both in terms of nuts and the fruit one uses to make the “sauce”. Also the ...
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