ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
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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May
19

Becoming Rich Delayed

During my morning shower, I like to think about Georgia’s economic prospects and how the country should develop. Since the Rose Revolution, there was a lot of “catch up growth”, i.e. growth that stems from returning from a state of chaos to normal economic conditions. Yet a country cannot catch up forever, and the only possibility for an emerging economy without substantial natural resources to sustain high growth is to profitably interact with the rest of the world. Usually, while I put shampoo on my hair, I start thinking about what Georgia could deliv...
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Guest — Adam
The answer, I believe, is to stop using shampoo. I never get to that stage, and therefore I see continuing growth on a "catch-up b... Read More
Monday, 19 May 2014 3:03 PM
Guest — Eric Livny
I tend to conclude my early morning procedures with a cold shower, and hence tend to agree with both of you . Florian's main point... Read More
Monday, 19 May 2014 4:04 PM
Guest — Adam
A timely discussion. The GoG just announced the following program: http://agenda.ge/news/14407/eng
Tuesday, 20 May 2014 8:08 AM
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May
02

Education That Matters

Cuba’s Fidel Castro once famously said about his country: “Even our prostitutes have university degrees”. While we don’t know about prostitutes, something similar could be said about Georgia. Virtually all Georgians have university degrees, and, as every frequent user of taxi services knows, there are Georgian taxi drivers who have two of them. Yet Georgia’s permeation with human capital  is even more impressive than in Cuba, because Cubans were sent to schools by government command, while Georgians chose to become so literate just by their own moti...
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Guest — uli
In general I agree with your assessment, but I wonder why you missed some important points concerning university education. 1. Yo... Read More
Friday, 02 May 2014 11:11 PM
Guest — Tamar Khitarishvili
Your blog raises a lot of interesting points. I would like to address one related to the link between wages and the quality of edu... Read More
Monday, 05 May 2014 7:07 PM
Guest — Eric Livny
Dear Tamar, many thanks for your very thoughtful comments. I very much agree with the main thrust of your argument, namely, that G... Read More
Friday, 09 May 2014 5:05 PM
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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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Guest — RT
https://www.tenthousandvillages.com/ This is a chain of stores in the U.S. that sell all kind of hand-crafted items. E.g. coasters... Read More
Friday, 25 April 2014 6:06 PM
Guest — RT
Turkey's economy made a sharp jump after the 2001 crisis. Are you implying that Turkish sujuks did not exist until then?
Sunday, 04 May 2014 10:10 PM
Guest — Lasha
What you leave out of consideration is perhaps a demand side. In countries with high consumer confidence and strong demand (US, Ja... Read More
Thursday, 01 May 2014 1:01 PM
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Apr
11

Agriculture and Rural Development in Georgia: A Research Agenda

After many years on the back burner of policy discussion in Georgia, issues related to agriculture and rural development now seem to be at the forefront of debate. And for good reason, as these issues are incredibly complex and have important implications, not only for those residing in rural areas but also for those purchasing agricultural products in towns and cities. Yet we still have much to learn about agriculture and rural development in Georgia and many questions remain, especially from a policy perspective. Are vouchers for those working in the a...
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Mar
31

The Ethics of Empty Stomachs

At the end of Act 2 of Bertolt Brecht’s Three-Penny-Opera, the proletarian petty criminal Macheath and his prostitute Jenny reply to the bourgeois representatives of the establishment urging them to uphold moral standards: “First comes a full stomach, then comes ethics!” This aphorism echoes the widely held contention that ethical behavior is a privilege of those who have satisfied their material needs. How can one expect somebody who is fighting for survival to be decent and honorable? Indeed, when civilization broke down during wars and disasters, huma...
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Guest — Zahra
History of growth associated with development and switch from agriculture to industry and then to service sector. As the more inco... Read More
Monday, 21 April 2014 7:07 PM
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