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ISET Economist Blog

A blog about economics in the South Caucasus.
Feb
27

Make Kutaisi Great Again!

Have you ever heard about a mysterious law that predicts the size of a city? If you tell me the population of the largest city in a country, I can tell you the size of the second and third biggest cities. In 1949, George Zipf came up with the simple theory called the rank-size rule, or “Zipf 's law.” Applied to the size of cities, this law says that the second city and following smaller cities should represent a proportion of the largest city. For example, if the largest city in a country is populated with one million citizens, according to the law, the ...
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Florian Biermann
Interesting article. Maybe the 30% of Kutaisis population that left the city were the members of the Kutaisi Clan.
Wednesday, 01 March 2017 8:08 AM
Simon Appleby
London until the 1950s was not just the capital of England (or the United Kingdom). It was the capital of the British Empire. So m... Read More
Wednesday, 01 March 2017 12:12 PM
Ia Katsia
Thank you, Florian for your comment. There is of course no official statistics about affiliation of migrants from Kutaisi. It cou... Read More
Wednesday, 01 March 2017 3:03 PM
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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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Eric Livny
Why do we need a bloody and corrupt dictator to teach us the virtues of liberalizing Georgia’s foreign trade or not meddling with ... Read More
Tuesday, 20 December 2016 3:03 PM
Giorgi Vashakidze
The internet is full of critical accounts about the economic (and not only) aspects of Pinochets regime, including by Chileans and... Read More
Wednesday, 21 December 2016 8:08 AM
Eric Livny
I shared this article with a Hebrew University classmate of mine, currently an economics professor in Chile. This is what he wrote... Read More
Wednesday, 21 December 2016 1:01 PM
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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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Irakli Shalikashvili
It is a great peace to help you find out what the structural decomposition looks like in Georgia and how productivity of sectors a... Read More
Tuesday, 13 December 2016 11:11 AM
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Nov
14

Georgian Haves and Have-Nots. Who’s to Blame and What to Do?

Just like the World Bank’s Doing Business, Transparency International’s Corruption Perceptions Index and many other international rankings, the European Bank for Reconstruction and Development’s (EBRD) Transition Reports have typically carried a very positive message for Georgia, Eastern Europe’s poster child of transition since the Rose Revolution of 2003. This year’s Transition Report, launched last week in Tbilisi by Alexander Plekhanov, EBRD’s Deputy Director of Research, is somewhat exceptional in this regard. Subtitled “Equal opportunities in an un...
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Oct
29

Georgian Agriculture: Beacon or Red Lantern?

A question of causality: Does modernization of agriculture lead to economic growth or does growth induce a modernization of the agricultural sector? For many years, this question has been hotly debated among development economists. While those economists who believe in growth-led agriculture (GLA) were dominating until recently, now the proponents of agriculture-led growth (ALG) are afloat again. Which insights does this debate yield for Georgia? THE TRADITIONAL VIEW For a long time, the question seemed to be settled. If one asked a development economist...
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Simon Appleby
For heartbreaking real-life case studies of Chinas GLA model, where Chinese peasants were pillaged through punitive taxation (up t... Read More
Thursday, 03 November 2016 4:04 AM
Simon Appleby
I would question the rationale for deliberately focussing on labour-intensive agriculture. Six years ago I had rosy visions of com... Read More
Thursday, 03 November 2016 5:05 AM
Florian Biermann
Thanks a lot, Simon, for this interesting reading suggestion!
Friday, 11 November 2016 12:12 PM
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May
23

Georgia’s Revolutions and Economic Development: from 2004 to Present Time

Following the collapse of the Soviet Union, the Georgian nation went through a process of rapid dis-investment and de-industrialization. It was forced to shut down industrial plants, sending scrap metal abroad, and workers into subsistence farming. Hunger has never become an issue thanks to the country’s moderate climate and good soil conditions, yet inequality and associated political pressures rapidly reached catastrophic dimensions, unleashing cycles of violence, undermining the political order and inhibiting prospects of economic growth. *   &nb...
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Guest — Pratik
Thanks for an excellent summary. One quibble : I do not agree that fair distribution of resources is always an obvious trade-off a... Read More
Thursday, 26 May 2016 10:10 AM
Eric Livny
Dear Pratik, I certainly agree, to a CERTAIN EXTENT. It is easy to overshoot with free healthcare and education policies. Too much... Read More
Thursday, 26 May 2016 2:02 PM
pratik
Thanks, Eric. And I think we will agree there is a flip side too? As seen in US, where absence of universal health care system has... Read More
Friday, 27 May 2016 6:06 PM
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