When thinking of “market distortions” we typically imagine government regulations, taxes and subsidies that prevent market mechanisms from achieving an optimal outcome. For example, if you pay $100 for a 30-minute taxi ride (as is the case in many European capitals), you can easily relate it to a government regulation requiring all taxi drivers to be licensed (at a very high cost). In the absence of such a requirement many more drivers would be able to enter the taxi driving profession, increasing supply and reducing prices.
However, the government is no...
ISET Economist Blog
A blog about economics in the South Caucasus.
Jun
13
Jun
06
“I’m Georgian, and therefore I am European.” These were the words late Georgian Prime Minister Zurab Zhvania chose to express Georgia’s EU aspirations when speaking in front of the Council of Europe in 1999. Reading very much like Martin Luther King’s “I have a dream”, Zhvania’s dramatic statement conveyed twin desires: i) to join the European family of nations and ii) to break out of Russia’s traditional sphere of influence, its political, economic, and cultural domination of Georgia since early 19th century.
On June 27, the European Union plans to sign...
May
30
There are many reasons to love the concept of farmer cooperation (and cooperation more generally). To begin with, there is a great aesthetic value in seeing people coming together, sharing resources and helping each other. After all, instinctive collectivism was the basic condition of human existence from time immemorial. But, there are also powerful economic reasons for farmer cooperation.
Smallholders are often too small to independently access markets, and can be easily exploited by middlemen and local monopolies. Service cooperatives can increas...
Apr
25
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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