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ISET Economist Blog

A blog about economics in the South Caucasus.
Jun
30

Georgian Nepotism

In Georgia, employment is often found not through prevailing in fair, orderly selection processes, but through personal connections. This is a well-known fact almost nobody denies. It is evident in almost every Georgian firm and institution. In a hospital you encounter a “nurse” not capable of the most basic medical accomplishments, in one of Tbilisi’s universities you meet a “cleaning woman” who is mentally ill, known for scaring everybody through aggressive and inappropriate behavior, and in the railway station you buy a ticket from a clerk who knows n...
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Guest — Eteri
Nepotism – one of the forms of corruption – is a use of public office for a private gain that is distributing favors to family mem... Read More
Monday, 30 June 2014 11:11 AM
Guest — Helene Ryding
It seems to me several issues are rolled into "nepotism" as described here, and they need to be unpacked. First of all, everyone ... Read More
Monday, 30 June 2014 5:05 PM
Guest — Eric Livny
Roba’s general observation is spot on!!! Coffee makers and coffee drinkers of Georgia unite!!! I am truly puzzled by nepotism as a... Read More
Monday, 30 June 2014 6:06 PM
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Jun
20

Why Care About Informal Employment?

Before answering this question, let us define what economists usually mean with ” informal employment”. There is some confusion with this term, and sometimes it is improperly used as a synonym for tax evasion or illegality. ILO defines informal employment as: employment “consisting of units engaged in the production of goods or services with the primary objective of generating employment and incomes to the persons concerned. These units typically operate at a low level of organisation, with little or no division between labour and capital as factors of p...
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Jun
02

Pawnshop Mentality

“Jewelry you can pawn whenever you encounter financial difficulties", we were told by a friend. In our circles of acquaintances there are quite a number of people who enjoy the services of pawnshops. The reasons range from renovating apartments, paying tuition for children, and buying new hi-fi systems for the car, to repaying the 1000 lari that the 18 year-old son had lost in gambling. According to a survey of GeoStat (which accounts for all figures provided in this article), in 2013 the annual interest rate on pawnshop loans was 54,1%. For loans denomi...
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Guest — Helene Ryding
Makes microfinance look cheap doesn't it?
Monday, 02 June 2014 5:05 PM
Guest — Eric Livny
What about a typical pawnshop loan term? I would think that people use pawnshops ("lombardi") in an emergency for extremely short-... Read More
Tuesday, 03 June 2014 8:08 AM
Guest — Maya G.
You are right Eric, but in some cases "lombards" are the only source for financing HHs needs and not for only short-term. Rural po... Read More
Thursday, 12 June 2014 3:03 PM
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May
26

Discrimination in Georgia

On May 2, 2014, the Georgian parliament unanimously passed the law on the elimination of any form of discrimination. The stated objective of the law is to ensure that any physical or legal entity equally benefits from all rights defined by Georgian legislation, irrespective of race, skin color, language, sex, citizenship, place of origin, birth or residence, wealth or class status, religion or belief, national, ethnic or social belonging, profession, marital or health status, disabilities, sexual orientation, gender identity, political or other considera...
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Guest — Simon Appleby
Sometime's one man's trash is another man's treasure. Many Turkish-owned companies in Georgia preferentially employ Georgians of A... Read More
Tuesday, 27 May 2014 6:06 AM
Guest — Jeff
There is more to employment discrimination than mere stereotyping. The employer's perception that his or her customers would prefe... Read More
Tuesday, 27 May 2014 1:01 PM
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May
23

Georgian Shadow Economy - its Past and its Legacy

The existence of a sizeable shadow (or second, informal) economy in the USSR was and is well-known. The Soviet era was characterized by a very rigid formal system with a high level of bureaucratization and inefficient planning. This resulted in many problems, both in terms of production and consumption. Soviet consumers experienced constant frustration and dissatisfaction caused by endlessly searching for goods and services they demanded, the need to queue for them without any guarantee of getting what they wanted, and the risk of having instead to accep...
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Guest — Eric Livny
A very interesting aspect of the Georgian legacy! I am fascinated by the contrast between the extremely positive role of honor-bas... Read More
Friday, 23 May 2014 10:10 AM
Guest — Adam
Great piece!
Friday, 23 May 2014 11:11 AM
Guest — NP
This contrast is indeed remarkable. We just need to see whether Saakashvili's "revolution" has been sufficient to alter permanentl... Read More
Saturday, 24 May 2014 12:12 AM
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Mar
24

Yes, We Trust!

Until the 1960s, Japan was an amazing place to live. One did not have to lock one’s house, car, or bicycle, as nobody was going to steal anything. Theft, burglary, and cheating were virtually non-existent in the Japanese society of those days. Imagine how much resources this saved, as Japanese did not have to employ guards, they did not have to install alarm systems, they even did not need to buy locks. Moreover, they needed less police and prisons, and Japanese firms did not have to install complex control mechanisms for making sure that employees did n...
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Guest — Eric
If we trust our neighbors, what prevents us from making peace with them?A couple of days ago, a Facebook friend of mine posted a w... Read More
Monday, 24 March 2014 10:10 PM
Guest — Georgi Shengelia
One American said: "If my neighbor will be rich, I can sell my product in higher prices and I will become richer". I like this phi... Read More
Monday, 24 March 2014 11:11 PM
Guest — Randy
You say "Only 1% of Azerbaijani citizens approve of doing business with Armenians, and only 22% of Armenians would approve their f... Read More
Tuesday, 25 March 2014 2:02 AM
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