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
09
One day in my village, I saw our neighbors carrying TV sets, refrigerators, parabolic antennas, and washing machines out of their house. Soon I found out that they were hiding all that stuff from the Social Service Agency (SSA) that was about to check eligibility for social benefits. Later, when I spoke with some other villagers, it turned out that some families had even sold their cows to become eligible for social assistance. “Cows are costly and do not give income on a permanent basis”, they said. Others avoided work contracts because official em...
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...
Jun
02
“Jewelry you can pawn whenever you encounter financial difficulties", we were told by a friend. In our circles of acquaintances there are quite a number of people who enjoy the services of pawnshops. The reasons range from renovating apartments, paying tuition for children, and buying new hi-fi systems for the car, to repaying the 1000 lari that the 18 year-old son had lost in gambling.
According to a survey of GeoStat (which accounts for all figures provided in this article), in 2013 the annual interest rate on pawnshop loans was 54,1%. For loans denomi...
Our Partners
