ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
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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Mar
01

Free Trade vs. Protectionism: Georgia's Contribution to an Old Debate

Georgia is flooded with cheap Turkish products: tasteless winter tomatoes, clothes, construction materials, you name it. Turkish goods are everywhere – in specialized shops in central Tbilisi, supermarkets, and the Eliava Bazroba. Is this happening because Turkey is our neighbor, because Georgian people love Turkish products, or what? Turkish exports to Georgia have been growing very fast since the Rose Revolution but they received an additional push in 2009, following the signing of a bilateral free trade agreement (FTA) between the two countries in Nov...
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Guest — Simon Appleby
There have been unofficial barriers to food imports to Georgia for some years, including eggs and chilled beef. These are now bein... Read More
Friday, 01 March 2013 5:05 PM
Guest — Irakli
I totally agree that those instruments will be very beneficial for development of Georgian agricultural production at some point. ... Read More
Friday, 01 March 2013 8:08 PM
Guest — Simon Appleby
Reducing taxes is hardly "giving gold bullion" to investors; they have to raise bullion on their own at very high premiums to acco... Read More
Friday, 01 March 2013 9:09 PM
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Feb
15

Is Some Degree of Corruption Good for Growth? – It Could Be.

It is a commonly accepted view that corruption is bad for economic growth. It leads to an inefficient allocation of resources by contradicting the rules of fair competition and by setting wrong incentives. Patronage and bribery are two components that define the notion of corruption and which cause the inefficiencies associated with it. Patronage often leads to the unfair delegation of the power of decision making to economic agents who do not posess the relevant skills to make good decisions. In the absence of patronage, ceteris paribus, the power of de...
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Guest — Nino
The last part about the region reminds me of the prisoners' dilemma __ if everybody else is corrupt, maybe it is better to be corr... Read More
Friday, 15 February 2013 10:10 AM
Guest — Florian
Is it prohibited for Georgian entrepreneurs to pay bribes abroad? Georgia should reconsider that rule. Until a few years ago, Germ... Read More
Friday, 15 February 2013 2:02 PM
Guest — Eric
Giorgi,I agree with the discussion in your blog up to the point where you make the link to Georgia. The thumb rule provided by Hec... Read More
Friday, 15 February 2013 4:04 PM
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Jan
18

On Inequality, Growth and the Kuznets Curve in Georgia

Is inequality bad for economic development? There has been a lively debate on this issue. Some economists argue that inequality is necessary for economic growth, while others are against it. Relatively recent empirical studies have found that in countries with relatively low per capita income inequality hampers growth. One of the main ways in which high inequality negatively affects economic growth is social turmoil. Social discontent is translated into socio-political instability, raising political and economic uncertainty in a country, which in turn im...
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Guest — Giorgi Mekerishvili
Interesting piece Givi. Figure 2 shows country level Gini Index as far as I understand. So, it catches urban/rural inequality (to ... Read More
Friday, 18 January 2013 4:04 PM
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Jan
11

Institutions, Politics, and Development

How can a society become more prosperous? This question has been on the minds of economists and policymakers for centuries. More than two hundred years ago, Adam Smith wrote that “little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice, all the rest being brought about by the natural course of things.” Yet, still today, many societies around the world are characterized not by peace, easy taxes, and a tolerable administration of justice, but by c...
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Guest — Vusal Mammadrzayev
Adam, you mentioned that the weak institutions, less transparency and political instability is the main constraint in the economic... Read More
Tuesday, 15 January 2013 9:09 PM
Guest — NP
I like a lot this piece. Actually, I believe Georgia went through a very active process of modernization in many areas under the p... Read More
Thursday, 17 January 2013 11:11 AM
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Dec
03

Roads and Rural Development: the Case of Samtskhe Javakheti

A few days after the beginning of the August 2008 war with Russia, I found myself on an epic journey through Kvemo Kartli and the volcanic plateau of Samtkhe-Javakheti to Turkey. In an effort to take my family to safety, I was driving a fully-loaded off-road vehicle on what was marked on my map as a “road” from Tbilisi via Tetri Tskharo and Tsalka to Akhatsikhe. This journey of 270 km took about 36 hours, including one hard-to-forget night at a “hotel” in Tsalka (yes, there was and still is such an establishment in Tsalka!). Ok, I admit to taking a littl...
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Guest — Vusal Mammadrzayev
Thank you for post. I have two questions. 1) Which part of this increasing income comes from agriculture? 2) Does there actually ... Read More
Monday, 03 December 2012 9:09 PM
Guest — Eric
Vusal, there are detailed micro-level data on income components. The question you are asking is exactly the kind of question you c... Read More
Tuesday, 04 December 2012 8:08 AM
Guest — Eric
You are talking to a former paratrooper Seriously, we were very far from the combat zone, in a rather serene environment... Also ... Read More
Saturday, 08 December 2012 3:03 PM
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