ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
May
08

The Soviet Hangover

Recently, we discussed the low ranking of Georgia when it comes to social capital (“Since When Do Georgians Trust Banks More Than Friends?”). In the 2012 Legatum Prosperity Index our country ranked #140 in the social capital subindex, out of 142 surveyed countries! This seems unbelievable and even shocking, but if we explore the topic a little bit deeper, we may find reasons for such a low ranking. The World Bank definition of social capital is the following: “Social capital refers to the institutions, relationships, and norms that shape the quality and ...
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Guest — Wiweck Singh
I believe, this is the one of the core constraint restraining development of Georgian economy and society at large.
Wednesday, 08 May 2013 10:10 AM
Guest — Giorgi Mekerishvili
Besides the lack of trust in such formal institutions due to the Soviet experience another reason for the low social capital is ci... Read More
Wednesday, 08 May 2013 11:11 AM
Guest — Helene Ryding
This also explains why housing blocks do not have reserve funds to cover repairs, or insulate their buildings.
Wednesday, 08 May 2013 12:12 PM
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Mar
19

The Economics of Happiness

The Kingdom of Bhutan is a very special country. When in 2004 King Wangchuck announced that there would be free elections and the kingdom would be gradually transformed into a democracy, people demonstrated in the streets against these reforms. They were so satisfied with their monarchy and their ruler that they tried to urge him not to give away any of his absolute powers to an elected parliament. Also economically, Bhutan is special. It is the only country in the world that does not try to maximize the gross domestic product (GDP). Instead, King Wangch...
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Guest — Florian
"Consumer dystopia"? I have to read that book! :-)
Tuesday, 26 March 2013 1:01 PM
Guest — Eric
Since Bhutan was mentioned, here a scholarly article discussing Victor Pelevin's Generation П From Homo Sovieticus to Homo Zapiens... Read More
Tuesday, 19 March 2013 4:04 PM
Guest — Florian
Indeed, these are interesting questions. I do not know whether the tsunami and the Fukushima disaster were reflected in the happin... Read More
Tuesday, 26 March 2013 1:01 PM
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Jan
23

“The Paradox of Gifts: I Know What I Have Given You. I Do Not Know What You Have Received” - Dr. SunWolf

In 1993 Joel Waldfogel published a paper “The Deadweight Loss of Christmas” in which he declared that the tradition of gift-giving causes economic losses for society because recipients generally value the items they receive as gifts less than the price that was paid by the givers. The source of this inefficiency is caused by the fact that the buyer is not the final consumer of a good and thus there may be a mismatch between the giver’s and the receiver’s preferences. Waldfogel’s study showed that gifts from friends and other people very close to the reci...
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Guest — Nino
Of course, we will. Happiness of our loved ones is in our utility function and we will want to see them happy, no matter 20% more ... Read More
Thursday, 24 January 2013 10:10 AM
Guest — Muhammad Asali
Thank you Maka for your nice post. Ending it with a happy comment is also appreciated. Notwithstanding, as a human being first, an... Read More
Saturday, 26 January 2013 11:11 AM
Guest — Eric
A very interesting point, Muhammad (last paragraph)! I understand that the wedding gift tradition in Israel is now to cut checks. ... Read More
Saturday, 26 January 2013 9:09 PM
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Jan
09

Snobbism and Status Concerns – Primitives of Georgian Socio-historical Psychology and Their Economic Implications

A bit of history: In 1905, Max Weber, in his masterpiece, “The Protestant Ethics and Spirit of Capitalism”, proposed an interesting hypothesis which claimed that Protestantism, Calvinism and Puritan ethics influenced development of capitalism. Since, Catholic Church rejected worldly affairs and constantly preached for its parish that the goal of existence is afterlife rather than life itself, it also implied rejection of pursuit of wealth and possession. Starting from the 17th century, emergence of various Protestant church movements, first in Engla...
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Guest — Sanjit Dhami
Good stuff Giorgi, although I differ with several things here. I think this is exciting stuff and should be taught in all "growth ... Read More
Thursday, 10 January 2013 7:07 AM
Guest — Sanjit Dhami
Giorgi, your understanding in the first paragraph is correct. Evidential reasoning works whenever strategic interaction takes plac... Read More
Thursday, 10 January 2013 1:01 PM
Guest — Sanjit Dhami
And perhaps you could discuss this with Florian, who is not only very knowledgeable but also a broad-minded, thinking person (an i... Read More
Thursday, 10 January 2013 1:01 PM
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Dec
22

Money Can Buy Me Love, In The Caucasus

This blog post is a sequel to “Price of a Woman: Economic Rationale behind Marriage Payments in Georgia”. I recently found very interesting data about bride prices in the Georgian highlands and the North Caucasus, which I am now going to share with you. Payment to a bride's parents was widespread in the Georgian highlands and the North Caucasus. This custom was rooted in local traditions and everyone obeyed it. Bride prices were either paid in money or its equivalent in livestock, most commonly in oxen. The price would vary according to the social standi...
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Guest — Florian
In Georgia the market mechanism seems to work. At least in the highlands, the market reacted to the shortage of women by implement... Read More
Thursday, 27 December 2012 12:12 PM
Guest — William Ellis
Thank you for this post and your interesting blog.I've recently had experience of bride prices. I've been involved with a charity ... Read More
Saturday, 29 December 2012 5:05 PM
Guest — Maka
Dear William and Florian,Thank you for your interesting [email protected] : Related to Romanism. I believe Romantism was involved... Read More
Sunday, 20 January 2013 5:05 PM
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Aug
22

Price Of a Woman: Economic Rationale Behind Marriage Payments in Georgia

We economists tend to search for economics behind everything. It's as if it is some kind of disease, for which there is no cure. I admit, I myself suffer from it. Last weekend I visited Shatili, a historic highland village in Georgia located near the border with Chechnya. This unique fortress built with stone and mortar, isolated from the rest of the world makes you think about your ancestors. Our guide told us many interesting facts about people from the highlands, and one of them attracted my attention very much. Particularity the existence of “Urvadi”...
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Guest — G.T.
Very nice and interesting topic discussed in an interesting way. I just want to express my opinion about the Bride Price and Dowry... Read More
Thursday, 23 August 2012 5:05 PM
Guest — Maka
G.T. Thank you for your comment. I agree with you that nowadays couples themselves possess and have official right on their prope... Read More
Friday, 24 August 2012 12:12 PM
Guest — Eric
A great, mind-boggling post…It could be about population density but not for the reason stated in Maka’s post. In a sparsely popul... Read More
Saturday, 25 August 2012 12:12 AM
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