Studying at Georgian universities in the 1990’s was ludicrous. The students or their parents negotiated with the heads of the exam committees and/or the deans of the faculties about the “terms and conditions”, i.e. the bribes that would have to be paid and the “services” that would be delivered in exchange. One could choose from a broad menu of different corruptive services, covering admissions, grades, and scholarships, and the price one had to pay varied according to what one had chosen. The law of supply and demand caused highly demanded professions like diplomacy to be more expensive than, for example, economics (which was not very popular back then).

After a consensus was achieved between a student and corrupt university employees, the student’s name was included in a so-called “red list”. During the exams, students who were on these lists would get exams which were already filled out, leading to grades in accordance with the package they had ordered. 

A slightly more concealed method was to write a code word in the first sentence of the exam. This allowed the instructor to easily recognize those students who had ordered “preferential treatment”, often students whom they had taught private lessons before. Oral exams worked even simpler: the student had to hand over to the examiner the grade-book for entering the exam result, and some students had “unintentionally” displaced some bank notes between the pages of the grade book.

In these wild years, people could buy diplomas without attending a single lecture. Many taxi drivers in Tbilisi not only bought their driving licenses in the 1990’s, but they also boast with the “two red diplomas” they obtained in those times (diplomas with distinction were printed on red paper). 

In 2004, the government took care of this issue by introducing the unified entry exams for universities. Every university applicant had to take three general exams and one subject-specific test conducted by the National Examination Center (NAEC). This reform was a tremendous success – from now on, in Georgia neither money nor connections could smooth one’s way into the university.

WHY ARE PEOPLE CORRUPT?

Contrary to a commonly held belief, corruption has almost nothing to do with the ethical standards which prevail in a society. As a corruption expert once told us, there is a widespread conviction in the Muslim world that corruption could be fought by reviving Islam in their societies. If everyone were a good Muslim, they think, corruption would disappear automatically. This is entirely mistaken and explains to some extent why most Muslim countries suffer from ravaging corruption. Corruption is a structural problem and does not result from rotten intentions of individuals.

In game theory, an equilibrium is defined as a situation where no individual can unilaterally change their behavior without worsening their own outcomes. In this sense, a society can be in a corrupt equilibrium or in an integrity equilibrium. If one is in a corrupt equilibrium, deviating as an individual, i.e. returning to integrity, is extremely costly. If everyone bribes the university and you don’t, the result will simply be that you do not get admitted. Likewise, if everyone bribes the doctors in the hospitals and the government officials but you are the only one who doesn’t, you will simply be disadvantaged compared to the others. 

But in a corruptive equilibrium, even those who receive bribes can’t deviate without incurring high costs. In Greece, salaries of hospital doctors are kept artificially low because one assumes that a physician’s salary will be topped up through bribe money. If in such a situation you are an individual doctor who rejects bribe payments, the money you are left with may not even be sufficient for you to make a living.

If one is in an integrity equilibrium, the situation is symmetric but superior. If you are in a situation where nobody takes bribes, you take a high risk that your attempt to get “preferential treatment” in the admissions exam will not lead you into university but into prison. Likewise, the university instructor who communicates that he would be open to receive “recognition” would also face a high risk of being reported and punished.

To get out of a bad equilibrium, a coordinated effort is required. One has to move to a new equilibrium without the necessity of costly individual deviations. If all people who were formerly corrupt regained their integrity instantaneously, one has overcome the problem. A good government can organize this coordination.

PRAECEPTOR GEORGIAE

Georgia taught the world how an equilibrium change can be achieved, not only in the educational sphere.  

In the NAEC system, a small committee is assembled for each subject. They design the exams – nobody except for them knows the exam problems in advance. The exam papers are specially packed and opened only in front of students, right before the exam starts. Those students who sit in the first row (seats are randomly assigned) are asked to sign that the exams were untouched and opened under the students’ eyes. No student is allowed to write their name on the exam (there are codes which match students with exams), and any disclosure of one’s identify will lead to disqualification. On top of that, each exam is checked twice by different persons, and if scores differ, then a third evaluation is called in. 

Since 2004, some minor adjustments were made, but the NAEC system essentially works in the same way as it was established 11 years ago. While under Shevardnadze even the most gifted kids could forget about higher education if they had no money or connections (even scholarships were awarded in a corrupt way), now it is a matter of talent and diligence whether or not one will make it to university. 

The importance of this achievement cannot be overestimated. For a country without oil or significant amounts of other natural resources, human capital is essentially the only resource that can drive economic progress. For Georgia, it is therefore has paramount importance to utilize on the potential of each of its citizens. All talents, also those born in rural areas, need to be given the chance to actualize their potential. As argued in Florian Biermann’s article “The Economics of Great Personalities”, which can be found on the ISET Economist Blog, this is Georgia’s only chance to catch up with the West.

THE PROPOSED REFORM

The Ministry of Education announced that after 2016, the university admission exams will merge with the final examinations of schools. Students will have to take one unified exam to receive a school diploma, which will also be the basis for admissions to universities. This system will be similar to the abitur diploma in Germany, the A-level exams in the UK, and matura exams in several other European countries.

The Ministry of Education did not announce yet what will be the exact format of the new exams, but the main concern is that will be conducted in a decentralized way, i.e. by individual schools (as the school-leaving exams today). To move out of the corrupt equilibrium, it was necessary to create a centralized exam, because only a specialized agency like NAEC was powerful enough to effectively prevent corruption. It requires competence, professionalism, determination, and impartiality to eradicate corruption, and there are many schools where these properties are lacking. 

Considering the experience of school-leaving exams, one has to fear that through a decentralization of the admissions exams corruption will find its way back into the Georgian educational. As we know from personal sources, there are private schools in Tbilisi which for a fee guarantee school-leaving diplomas to their students. Teachers hand out the tests with correct answers a week before the exams. When once these answers turned out to be wrong, during the exam teachers were individually helping those students who had paid the fee. There were cases when straight-A-students with golden medal and excellent performances in the school-leaving exams could not even meet the minimum threshold for university admission at the NAEC exams.

The Ministry of Education does not have sufficient resources to guarantee standards in decentralized exams that come close to what is achieved by NAEC. 

Georgian educational reforms should not start with the examination system, one of the few things that function reasonably well. There are many fundamental problems to take care of, like the low qualification of teachers (which is related to the low salaries they receive). To give Georgian children better education, one should start with the education itself, not with the examination.

Georgians are people who have a strong desire for fairness and therefore hate corruption, and they were hugely suffering from being in a corrupt equilibrium for so long (this was described in the article “Georgian Decency as a Competitive Advantage” by Florian Biermann, to be found on the ISET Economist Blog). It would be a huge mistake to risk what has been achieved in Georgia in this respect.