ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
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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3165
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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1802
Nov
21

Structural Transformation in Georgia – In the Right Direction at a Turtle’s Pace

  Structural transformation of the economy is one of the most important determinants of economic development. Almost invariably, nations that have managed to pull themselves out of poverty were able to diversify their economies away from low productivity sectors. In advanced countries, productivity differences between sectors are generally small, and growth mostly happens because of productivity improvements within sectors. Developing countries, on the other hand, are characterized by large productivity gaps between the sectors of their economies. ...
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2865
Nov
05

Lock, Stock and Two Smoking Barrels

“All the evidence shows that God was actually quite a gambler, and the universe is a great casino, where dice are thrown, and roulette wheels spin on every occasion. Over a large number of bets, the odds even out and we can make predictions; that's why casino owners are so rich. But over a very small number of rolls of the dice, the uncertainty principle is very important” – Stephen Hawking. Casinos, totalizators, and other gambling institutions are very popular in Georgia. According to the study “Gambling in Georgia – Second Report,” conducted by Transp...
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2115
Sep
26

Less Taxes = Higher Growth? Or not?

    Cutting taxes and achieving higher economic growth as a result is every politician’s dream. The 2016 parliamentary elections of Georgia showed just how important and controversial the question of taxation can become.  On the one hand, the Global Competitiveness Index Report that came out this month puts Georgia in the top 10 (9th place) among the countries with lowest tax rates. The current administration’s plans to abolish taxes on undistributed profit is likely to improve this ranking even more. On the other hand, many politicians a...
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1980

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