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A blog about economics in the South Caucasus.

The Spinning of Georgia’s Political Carousel, 2004-2014


The sacking of Irakli Alasania, Georgia’s Defense Minister since October 2012, sent shock waves through the country’s political system. But it should not have. After all, Alasania is one of 9 incumbents in this key ministry since 2004. Moreover, with 2 years and one month in office he is tied for second place with David Kezerashvili as the longest serving Minister of Defense after Bacho Akhalaia (2 years and 11 months). Fourth on the list is Irakli Okruashvili (one year and 11 months). All other ministers served between 3 and 8 months.

Neither should Alasania take offence with PM Garibashvili’s calling him “reckless, foolish and ambitious”. All his long-serving predecessors in office fared much worse. Akhalaia is currently serving a 3-year term in prison. Kezerashvili was detained in France in early 2013 on multiple criminal charges and escaped extradition by the skin of his teeth. Okruashvili was sentenced in 2008 to an 11-year prison term in absentia. The last minister of defense under Shevardnadze, a civil war hero and martial arts specialist Davit Tevzadze, had to battle corruption allegations back in 2004, and completely retired from public life. Dimitri Shashkin, the last minister of defense under Saakashvili, chose to weather the 2012 political storm in voluntary exile.

As a matter of fact, the degree of reshuffling plaguing the Ministry of Defense is not all that special in Georgian politics. As shown in Figure 1, all other ministries have seen frequent changes in leadership. In fact, the ministry with the least continuity at the top – and no sustainable leadership until October 2012 – has been the Ministry of Economy and Sustainable Development. Since 2004, this ministry has had 11 individuals serving that role, ranging from heavyweights, such as Kakha Bendukidze, all the way to featherweight Vera Kobalia.

Figure 1. Number of ministers, by ministry, since the Rose Revolution

Full data on the Ministerial Turnover available here


THE REGIONAL CONTEXT

Georgia clearly stands out in the degree of political change and ministerial reshuffling compared to its immediate environment. To begin with, Georgia is the only country in the region to go through an orderly democratic transition in 2012. But Georgia is worlds apart also when it comes to mobility in top ministerial jobs.

Both Armenia and Azerbaijan see much less rotation within its political power structures. Azerbaijan is perhaps an extreme case since most Azeri strongmen have been holding to their positions since mid-90s on the basis of personal allegiance and family ties to the ruling Aliyev/Pashaev clan. For example, Safar Abiyev served as Azerbaijan’s minister of defense for more than 17 years (1995-2013). Kamaladdin Heydarov (allegedly one of the richest Azeris) has been holding to financially lucrative positions as head of State Customs Committee from 1995 till 2006, and Minister of Emergency Situations since 2006. Winds of change started blowing very recently with a few long-serving ministers (defense, economy and industry, agriculture, education, communication and high technology) stepping down and letting new blood into the system.

The situation has been quite a bit more dynamic in Armenia, which has had three presidents since independence – Levon Ter-Petrosyan (1991-1998), Robert Kocharian (1998-2008), and Serzh Sargsyan (since 2008). Sargsyan, Armenia’s current president, was the country’s defense minister for a total of 9 years (1993-95, 2000-2007) and has held other top security-related posts in between. His successor, Seyran Ohanyan, is heading up the Ministry of Defense since 2008. In fact, the vast majority of Armenia’s current ministers have been in office since the 2008 presidential elections, which can be considered the norm in most democratic countries around the world.


HOW MUCH CHANGE IN TOP POLITICAL JOBS IS GOOD FOR A COUNTRY?

In economics, it is common to represent the relationship between possible rates of taxation and the resulting levels of government revenue by means of the so-called Laffer curve. The idea is very simple: if the tax rate is set at 0%, the government will not be able to collect any revenue; the same is true, however, if the government sets the tax at 100% (since nobody will have any incentive to work). A conclusion from this simple analysis is that there is some medium level of tax (not necessarily 50%!) that maximizes government revenue.

One can apply the same logic to rotation in top political jobs and quality of governance. Zero or close to zero turnover (Azerbaijan-style) is clearly suboptimal. It prevents new people and ideas from bearing on decision-making, fosters corrupt networks and clientele politics. Georgian-style carousel, however, also leads to suboptimal outcomes. Ministers cannot be expected to make the right choices if they are replaced before they get a chance to learn the name of their secretary, let alone acquire a good sense of the sector they are in charge of (be it defense, foreign relations, agriculture, the economy as a whole, or education).

Compared to Armenia and, particularly, Azerbaijan, Georgian politics are extremely young and volatile. Over the last decade Georgia has had eight heads of government, from Zurab Zhvania to Irakli Garibashvili (six of these served under Mikheil Saakashvili in 2004-2012). Headed by 32 y.o. Irakli Garibashvili, the current Georgian administration clearly lacks experience in both policymaking and politics. This is reflected in the quality of decision-making (think how many new legal acts and regulations had to be put on hold or reversed in recent years and months), impatience (to get things done, and with each other) and rhetoric (Exhibit A: Garibashvili’s public remarks on Alasania’s character).

Figure 2. Per cent of ministers changed, Georgia, 2004-2014

Nov-13_2014_500_2

Figure 2 shows the % of ministers changed every year since the Rose Revolution of 2003. Given that the number of ministries varied over time from 22 to 17 (quite a few ministries have been liquidated following the Rose Revolution) this is the correct measure of instability in the top government jobs.

With two more months to go, the degree of ministerial turnover in 2014 has reached an alarmingly high level of 60% – the highest in Georgia’s recent history, excluding the three election years (2004, 2008 and 2012). In particular, it is higher than in 2007, a year which saw the beginning of mass protests against UNM rule. While certainly indicative of a crisis, Alasania’s departure does not signify any change in Georgia’s Euro-Atlantic orientation (despite UNM and Alasania’s attempts to claim so). Rather, it adds to Georgia’s growing pains as a fledgling state and democracy.

Every cloud has its silver lining and, like many observers, we find some comfort in the fact that the new Minister of Foreign Affairs, Tamar Beruchashvili, is no newcomer to policymaking and politics. The appointment of this seasoned career diplomat, who has for years handled Georgia’s relations with Europe, suggests that Georgia’s political system is slowly but surely gaining in strength and maturity.

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Guest - Simon Appleby on Friday, 14 November 2014 18:46

An oft-ignored aspect of the Laffer Curve is that a government's objective should not necessarily be to maximise tax revenue. A competing objective is maximising economic growth, which occurs to the left side of the point where revenue is maximised, leaving more money in the hands of the people to determine how it should be used..

Likewise, in government, the people's needs and politicians' needs do not necessarily align. Politicians often feel the need to be seen to be engaged in bold (and costly) initiatives, to justify their pay and enhance their careers. Often, masterly inactivity (or "positive non-intervention" as Sir John Cowperthwaite used to call it) is preferable for the people's welfare.

http://www.telegraph.co.uk/news/obituaries/1508696/Sir-John-Cowperthwaite.html

Ideally the economy should be so robust and independent of state control that even inexperienced, inept or bent ministers cannot do it much damage. A small, skilled independent civil service is an important element in limiting the damage that politicians can do. Georgia should aspire to having an economy too vigourous for ministerial reshuffles to have any effect at all.

An oft-ignored aspect of the Laffer Curve is that a government's objective should not necessarily be to maximise tax revenue. A competing objective is maximising economic growth, which occurs to the left side of the point where revenue is maximised, leaving more money in the hands of the people to determine how it should be used.. Likewise, in government, the people's needs and politicians' needs do not necessarily align. Politicians often feel the need to be seen to be engaged in bold (and costly) initiatives, to justify their pay and enhance their careers. Often, masterly inactivity (or "positive non-intervention" as Sir John Cowperthwaite used to call it) is preferable for the people's welfare. http://www.telegraph.co.uk/news/obituaries/1508696/Sir-John-Cowperthwaite.html Ideally the economy should be so robust and independent of state control that even inexperienced, inept or bent ministers cannot do it much damage. A small, skilled independent civil service is an important element in limiting the damage that politicians can do. Georgia should aspire to having an economy too vigourous for ministerial reshuffles to have any effect at all.
Guest - Eric Livny on Friday, 14 November 2014 19:41

My use of the Laffer curve metaphor was in no way meant to suggest that tax revenue maximization should be anybody's objective. God forbid!!! (particularly on day when we are mourning Kakha Bendukidze's death, RIP)

Your second point, Simon, is highly reminiscent of Lenin's writing in State and Revolution, on the eve of the October 1917 coup (Great October Revolution): http://en.wikipedia.org/wiki/The_State_and_Revolution, which could be summarized as follows:

"Bureaucracy is a product of the bourgeois order... in socialist state bureaucracy should be a reasonably straightforward matter... 'Under socialism the housewife will learn to run the state'... Under socialism all will govern in turn and will soon be accustomed to no one governing ..."

(my paraphrasing based on Foundations of Public Administration: A Comparative Approach by Peter Harris)

This confirms what I have known for long: philosophically-minded Marxists and Libertarians have much more in common than most people realize...

My use of the Laffer curve metaphor was in no way meant to suggest that tax revenue maximization should be anybody's objective. God forbid!!! (particularly on day when we are mourning Kakha Bendukidze's death, RIP) Your second point, Simon, is highly reminiscent of Lenin's writing in State and Revolution, on the eve of the October 1917 coup (Great October Revolution): http://en.wikipedia.org/wiki/The_State_and_Revolution, which could be summarized as follows: "Bureaucracy is a product of the bourgeois order... in socialist state bureaucracy should be a reasonably straightforward matter... 'Under socialism the housewife will learn to run the state'... Under socialism all will govern in turn and will soon be accustomed to no one governing ..." (my paraphrasing based on Foundations of Public Administration: A Comparative Approach by Peter Harris) This confirms what I have known for long: philosophically-minded Marxists and Libertarians have much more in common than most people realize...
Guest - Edith on Sunday, 16 November 2014 06:48

It is funny to see Georgians striving so hard to be a liberal democracy when America is still autocratic. So in a sense, they've done a perfect of job of naming themselves a democracy and doing whatever behind closed doors. The American way of authoritarianism; I only wonder if the next century will be ruled by the passive aggressive autocracy (America, Europe), or the openly paternal and controlling Russia and China. They seem more efficient. I see it like an example of a child who doesn't want to go visit grandma. Russia and China would be parents who just say you have to go. End. Whereas America brings on the "Well, you love your grandma don't you? etc... bs" -------------short tangent

Recriminations and Resignations in Georgia Harbinger of US-backed Regime Change
ურთიერთბრალდებებისა და პოსტებიდან გადადგომის რეჟიმი, რომელსაც შეერთებული შტატები ზურგს უმაგრებდა, იცვლება

http://journal-neo.org/2014/11/14/recriminations-and-resignations-in-georgia-harbinger-of-us-backed-regime-change/

It is funny to see Georgians striving so hard to be a liberal democracy when America is still autocratic. So in a sense, they've done a perfect of job of naming themselves a democracy and doing whatever behind closed doors. The American way of authoritarianism; I only wonder if the next century will be ruled by the passive aggressive autocracy (America, Europe), or the openly paternal and controlling Russia and China. They seem more efficient. I see it like an example of a child who doesn't want to go visit grandma. Russia and China would be parents who just say you have to go. End. Whereas America brings on the "Well, you love your grandma don't you? etc... bs" -------------short tangent Recriminations and Resignations in Georgia Harbinger of US-backed Regime Change ურთიერთბრალდებებისა და პოსტებიდან გადადგომის რეჟიმი, რომელსაც შეერთებული შტატები ზურგს უმაგრებდა, იცვლება http://journal-neo.org/2014/11/14/recriminations-and-resignations-in-georgia-harbinger-of-us-backed-regime-change/
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