The problems facing Georgian courts

Note: This article first appeared in the Caucasus Data Blog, a joint production of CRRC Georgia and OC Media. It was written by Mariam Kobaladze, a Senior Researcher at CRRC Georgia. The views presented in the article are the author’s alone, and do not necessarily reflect the views of CRRC Georgia, USAID, East-West Management Institute, or any related entity.

Over the last few years, the court system in Georgia has been subject to criticism from politicians, civil society, and international bodies. The criticism mostly focused on the independence of judges, the selection and appointment of members of the Supreme Court, legislative shortcomings, access to court decisions, and the quality of court decisions, among a range of other issues. Prior to this, public trust in courts had already been low relative to other institutions, with only 17% of the public reporting they trusted the courts in 2019. 

Studies CRRC Georgia published in 2021 suggest that the main issue business people and legal professionals see in the court system is justice not delivered in a timely fashion. Yet, they view the issues in the court system as symptoms of the broader problems that other actors criticise.

When asked about the main challenges businesses face in the courts, half of businesses named time-related issues. The length of trials was named by 31% and delayed enforcement of court decisions was named by 19%. Relatively few, 10%, felt that the lack of independence of courts was an issue. 

The long timelines for court trials and enforcement of decisions were also discussed extensively in qualitative research. Businesses reported that trials can take years to conclude. Even when they do, enforcement of decisions takes so long that inflation and currency fluctuations can eat away at the value of settlements. As a result, some business people report that decisions settled in their favour, ‘merely stayed on paper’. Knowing that inflation and currency fluctuations will ultimately reduce the value of settlements, some businesses report that there is a strong incentive for those they are suing to delay trials and enforcement. 

The results were quite similar in a study of legal professionals’ attitudes that CRRC Georgia conducted in the spring and summer of 2021. Lawyers highlighted that court hearings and the issuance of rulings took longer than the limits set out in legislation. An NGO lawyer from Tbilisi told CRRC: ‘It is a fact that the court system cannot complete almost any case within the legally set norms […] often resolution of cases is so late that any interest towards the case is lost and it is impossible to restore the violated right’. 

Judges are aware of the problem. When discussing the long timelines around cases, they blamed heavy caseloads. They further noted that this also resulted in lower-quality decisions. ‘The increase in the number of cases impacts quality’,  a judge working in the criminal courts told CRRC. ‘Sometimes quality is damaged, sometimes [timelines]. Case trials are not finished on time.’

These were not the only issues with the judiciary that study participants mentioned. Lawyers mentioned issues around a dearth of common practice and lack of independence among investigators. While judges felt that low public trust was a problem for the court system as well as insufficient social guarantees for judges after retirement.

The above does not demonstrate that a lack of independence and opaque selection procedures for judges are not a problem. Rather, lawyers tended to suggest that most of the issues noted above were symptoms of the courts’ fundamental problems rather than the disease itself. They reported that without addressing the root causes, including how appointments throughout the judiciary are made, as well as case distribution rules, the judiciary is likely to continue functioning at sub-optimal levels. 

Murder on Khorava Street: The public’s knowledge and attitudes towards the Court decision

In early December 2017, two schoolchildren were killed on Khorava Street in Tbilisi. On May 31^st, 2018, Tbilisi City Court announced the decision on the Khorava Street murder case. The announcement caused mass demonstrations led by Zaza Saralidze, a father of one of the murdered children.

On June 19-26, 2018, within the EU-funded project “Facilitating Implementation of Reforms in the Judiciary (FAIR)”, CRRC-Georgia conducted a phone survey on people’s knowledge about the Court decision and their evaluation. The survey resulted in 1005 completed interviews, and is representative of the adult Georgian-speaking population of the country. The average margin of error of the survey is 2.8%.

The vast majority of people in Georgia (96%) have heard about the Khorava street murder. However, only 17% of those who have heard about the case know what the Court decision was: the sentencing of one defendant for murder and the other for attempted murder. The majority of people in Georgia (61%) did not know what the Court decided. Others had inaccurate or partial information. Nine percent thought the Court found one defendant not guilty and sentenced the other for murder. Five percent thought the Court found both defendants not guilty, and two percent thought the Court found both defendants guilty of murder. Tbilisians were slightly more aware of the decision than people outside Tbilisi (a 7-10% difference).

Those who had heard about the Court decision on the Khorava Street case were asked to evaluate its fairness. Only eight per cent evaluated the decision as fair. The majority (77%) said the decision was not fair. People who thought the case was unfair were asked why they thought it was unfair. The three most frequent answers included 1) The Prosecutor’s Office was covering for influential people’s relatives (28%); 2) The low quality of the investigation by the Prosecutor’s Office (8%); and 3) Influential people were covering for people close to them (7%). 

General injustice in the country was named by 3% of the population. In Tbilisi, the Court decision was evaluated as fair more than in other locales (a 5-7% difference).

When asked, “Which of the following is the responsibility of the Courts, prosecutor’s office, Ministry of Interior or other actors/bodies?”, 7% said the Courts were responsible for collecting evidence to prove the defendant is guilty and 12% said the Court was responsible for collecting evidence to prove the defendant is innocent. Large shares of the population responded ‘Don’t know’ to these general knowledge questions about collecting evidence (33% and 38%).

Following the mass street protests led by Zaza Saralidze, the government took two major steps in their political response: the Prosecutor General Irakli Shotadze resigned and a temporary investigative commission was established in the Parliament of Georgia to study the process of investigation of the case. Half the population (50%) support Shotadze’s resignation, about one fifth (19%) do not support the decision, and about one third (30%) don’t know what to think. People who have heard about the murder case were divided over the parliamentary commission: 28% said the Commission would manage to establish the truth and 32% said it would not manage to do so. One third (33%) did not know whether the temporary investigative commission would establish the truth about the case and seven percent knew nothing about the commission at all.

In Georgia, the vast majority of people have heard about the Khorava Street murders. Yet, they lack knowledge about the Court decision. Nevertheless, they evaluated it as unfair and blamed the Prosecutor’s Office for the most part. The political responses to the murder – the resignation of the Prosecutor General and the establishment of a parliamentary investigative commission – were generally supported by those who were aware of them. However, many were uncertain about these responses.

This blog post has been produced with the assistance of the European Union. Its contents are the sole responsibility of CRRC-Georgia, EMC, and IDFI and do not necessarily reflect the views of the European Union.

Was the population informed about the constitutional reform in Georgia?

[Note: This blog first appeared in OC-Media. The article was written by Tsisana Khundadze, a Senior Researcher at CRRC-Georgia. The views presented in this article are the author’s alone and do not necessarily reflect the views of CRRC-Georgia, the National Democratic Institute or any other related entity.]

After 10 months of discussions, the parliament of Georgia adopted amendments to the constitution of the country on September 29th and overrode the president’s veto on October 13th, 2017. The most widely discussed amendments are about rules for electing the president, self-governance principles, the definition of marriage, the sale of agricultural land to foreigners, the minimum age of judges and the country’s foreign policy  orientation. Because of the importance of the amendments, one would expect a high level of awareness among the population. However, despite the public meetings held and media coverage of the issue, according to the CRRC/NDI survey from June 2017, a majority of the population of Georgia was not aware of the constitutional reform process.

Survey fieldwork was conducted before the process of amending the constitution finished. Thus, people were asked whether they were aware or not that the State Constitutional Commission had adopted a Draft Revision of the Constitution. Thirty two percent of the population answered they were aware, while 60% stated that they were not. Of those who said they were aware, only 39% said they felt they had enough information about the proposed changes. Moreover, only 6% of people who were aware of the changes said they thought the changes fully reflected citizens’ opinions, and 47% said they partially reflected citizens’ opinions. A third (32%) said the proposed changes did not reflect people’s opinions at all.

People living in the capital were more informed compared to people living outside the capital. Notably, only 13% of people living in ethnic minority settlements reported being aware of the constitutional reform.


Younger people and those with lower levels of education were less aware of the the constitutional reform. Only 26% of people between the ages of 18 and 35 said they were aware. By comparison, 33% of people between the ages of 36 and 55 and 37% of those 56 and older said the same. Similarly, only 19% of people with secondary or lower education were aware of the changes, while 34% of people with secondary technical and 50% of people with tertiary education said they were aware.

Besides differences by age and the level of education, people naming different political parties as closest to them reported being aware of the process at different frequencies. Those who named Georgian Dream - Democratic Georgia, the Alliance of Patriots of Georgia and Bakradze-Ugulava - European Georgia were more informed than people who said that the United National Movement (UNM) or Georgian Labor Party were closest to them. The UNM’s and Labour Party’s supporters were least aware of the process surrounding constitutional amendments.



Awareness of the constitutional reform was low even after public meetings were held to discuss the changes. Younger people, people with secondary or lower education and people living outside Tbilisi were less informed about the process compared to older people, people with tertiary education and people living in the capital. The low level of awareness is especially striking in ethnic minority settlements and among people who named the United National Movement as the party closest to them. As for attitudes towards the changes, a majority of those who were aware felt they did not have enough information about the process and thought that the draft constitution either partially reflected, or did not at all reflect citizens’ opinions.

The data used in this blog post and other survey data is available at our Online Data Analysis portal.

Will an Independent Mayoral Candidate Bring Political Change to Georgia?

[Note: This piece was originally published at New Eastern Europe. It was written by David Sichinava. David is a Senior Policy Analyst at CRRC-Georgia and Assistant Professor at Tbilisi State University. The views expressed in this article do not necessarily reflect the views of CRRC-Georgia, the National Democratic Institute, Tbilisi State University, or any other affiliated entity.]

A June 2017 survey CRRC-Georgia carried out for the National Democratic Institute suggests that Aleksandre (Aleko) Elisashvili, an independent candidate and prominent grassroots activist could win the Tbilisi Mayoral elections, if the elections enter  a second round, which the polling also suggests is a possibility. While only election day will tell the ultimate result, if Elisashvili does win, it could be the start of a shake up of Georgian political life.

Local elections are set for October including the election of mayors in several self-governing cities. In Georgian local elections, the Tbilisi Mayoral race is considered the main race, given that the city contains roughly one third of the country’s population. For the ruling Georgian Dream party, former Energy Minister and Vice Premier Kakha Kaladze is running for the post. The United National Movement, which following defections consists of loyalists to Mikheil Saakashvili, has nominated Zaal Udumashvili, a former anchor on Rustavi 2, the country’s largest TV station. European Georgia, a party consisting of defectors from the United National Movement has nominated Elene Khostaria, a former official in the UNM government and currently an MP, for the mayoral race. The race also features Irma Inashvili, the leader of right-wing Alliance of Patriots, and Giorgi Gugava, endorsed by the Labour Party of Georgia.

Besides the party-affiliated candidates, Aleko Elisashvili, an independent who rose to prominence through his engagement with a variety of grassroots movements aimed at preserving Tbilisi’s urban heritage and currently serving on the Tbilisi city council, has thrown his hat into the race.

June 2017 polling CRRC carried out for NDI places Kaladze in the lead with 37% of the vote among likely voters. Elisashvili came in second with 22%, followed by Udumashvili (16%) and Khoshtaria (5%). According to the survey, 16% of likely voters in Tbilisi are undecided or refused to answer who they would vote for.

If undecided voters are distributed equally between parties, a simple but often accurate way of forecasting election outcomes in the absence of a large number of surveys, it suggests that Kaladze would garner about 42% of the vote in the first round of elections. If Kaladze receives less than 50% of the vote, the electoral threshold to win outright in the first round of Georgia’s mayoral elections, it would lead to a runoff. Given the relatively small sample of likely voters in Tbilisi in the survey and the fact that elections were still at least two months away, it is still unclear whether there will be a run-off, though it is a possibility.

Even though Elisashvili is polling 15 points behind Kaladze, in a runoff, Elisashvili could win the race. In a TV interview, both Udumashvili and Khoshtaria expressed their willingness to support any pro-Western opposition candidate against Kaladze in a second round. Assuming those parties supporters would turnout for Elisashvili, the polls suggest he would garner about 54% of the vote. Although Udumashvili is neck-and-neck for the second place, in case of runoff, he does not have Elisashvili’s declared support. Again, keeping in mind the relatively small Tbilisi sample and the level of error associated with it, this places Kaladze and Elisashvili in a neck-and-neck race.

That means that the campaign, and the race for undecided voters matters. While Kaladze has vowed to replace Soviet block flats with modern housing and promises to further invigorate Tbilisi’s lively nightlife, Elisashvili’s campaign has focused on urban politics and policy. He has attacked Tbilisi mayor’s office for corruption and is positioning himself as an anti-establishment candidate. Elisashvili’s negative stances towards large real estate developers and Tbilisi’s investor-induced construction frenzy indeed fit the anti-establishment image he’s cultivating.

A closer look at the NDI survey suggests Elisashvili is doing better than Kaladze among those voters who do not identify themselves with any party, almost 40% of the city’s population. Surprisingly for a grassroots activist, Elisashvili’s supporters are more likely to be older and well-off - two demographic groups who generally turn out to vote. They are also more likely to think that there is corruption, nepotism and a lack of professionalism in Tbilisi mayor’s office. Finally, voters who think that environmental pollution is the most important public goods issue in Tbilisi - which has consistently been viewed as the most important public goods issue in the capital - are also leaning towards Elisashvili, as are those who find recent construction in residential neighborhoods unfit to the area.

These political leanings in combination with support for Elisashvili make sense given his background. He was instrumental in founding Tpilisis Hamkari, an activist group concerned with preservation issues. Since its inception in 2005, Hamkari has led protest rallies to save several landmark buildings across Georgia’s capital from demolition. Started by a handful of activists, the movement climaxed in 2011 and 2012 when it drew hundreds to rallies attempting to save Gudiashvili square, a small pocket of urban green area in old Tbilisi. Apart from his work as an activist, Elisashvili also hosted political talk shows on the opposition-associated Kavkasia TV and served as head of the state parole board.

Elisashvili’s activism has contributed to his past political successes. In the 2014 local elections, he ran as an independent, winning a seat on Tbilisi city council in a narrowly fought race with candidates endorsed by the Georgian Dream and the United National Movement in the affluent Saburtalo district. At the city council, he fiercely criticized legislation the Georgian Dream-dominated city government proposed. Importantly, Elisashvili opposed the Panorama Tbilisi construction project which was endorsed by Bidzina Ivanishvili, Georgia’s former prime minister and the wealthiest man in the country.

Whether or not Elisashvili manages to maintain or increase his support, many care about the causes the independent candidate stands for. Georgians are extremely skeptical towards local government and issues like environmental pollution and urban development have become increasingly salient. Political scientists still argue whether such issues matter for party politics in post-communist societies. However, the polling and movements in different contexts increasingly suggest that activists have the potential to challenge and shake up city politics through focusing on these issues. The recent success of an anti-establishment social activist, Ada Colau, in Barcelona’s mayoral race is yet another example.

While, it is too early to say whether Elisashvili will be able to turn his popularity into a successful bid for the mayor’s office, the fact that an independent candidate with a relatively unusual political platform is polling strongly could suggest the winds of change are afloat on the political scene in Georgia. Whether those winds will lead towards a revival of Georgia’s democracy, or whether the 2017 local elections will be another round of hope followed by disappointment at the lack of the opposition’s political acumen like in the 2010 local elections awaits election day.

The data used in this article is available here. The input output model used to distribute voters is available here.

Rare evidence: Judges on challenges in the court system of Georgia

Georgia has long faced problems with its court system. On CRRC’s 2015 Caucasus Barometer survey, only about one in four people in Georgia reported trusting the country’s court system. Since 2012, there have been three sets of judicial reforms, yet according to a number of NGOs, there are still important issues to be solved.

We often hear what NGO representatives think about the challenges facing the judiciary system in Georgia. It is, however, rare to have the chance to learn what judges think about the system. In partnership with the Coalition for an Independent and Transparent Judiciary, CRRC-Georgia interviewed 12 current and former judges in Tbilisi, Kutaisi and Zugdidi in October-December, 2016. Although 28 judges were sampled originally, others could not be contacted or refused to be interviewed. Importantly, the findings of these interviews cannot be generalized. Still, they provide rather unique insights into what judges think about the problems in the judicial system in Georgia. 

Respondents named several important issues that have a negative impact on the court system. First, judges have large caseloads that might affect the quality of decisions. Thus, more judges are needed to handle cases. Second, judges note a lack of courtrooms. Both problems result in trials being delayed. As one judge noted:

We have a shortage of staff, we need more judges. There are too many cases. We fail to handle them all. We lack judges, <…> so, this may affect the quality of [court] decisions. Trials take too long, because we simply don’t have [enough] courtrooms. (Current judge; male; Tbilisi City Court).

Importantly, both these issues have already been addressed in the draft version of the 2017-2021 Court System Strategy, which calls for an increase in the number of judges as well as courtrooms.

The interviewed judges also noted the lack of trust in the court system as another important issue. The respondents believe that it may be the judges themselves who are sometimes responsible for the lack of trust in the court system. In their opinion, if judges in Georgia consistently issued well-elaborated verdicts, the system would earn more trust, since such verdicts would help avoid any suspicion about the quality of the verdict, particularly from representatives of the party that has lost.  

Respondents also think that the media influences public opinion about the courts. Some of the respondents believe that the media prefers to cover problematic cases, especially when the court competence is to be questioned, rather than the cases when the court came up with a well-reasoned and convincing verdict. Generally, the interviewed judges are not against media coverage of the court proceedings and believe that such coverage increases the transparency of courts. However, some of them believe that journalists should be trained on how to use legal terminology properly.

In spite of the challenges associated with such interviews, it would be valuable to continue to collect these first-hand accounts of the court system from judges. The full report of this study is available here. 

Why the civil service? The civil service as seen by civil servants in Georgia

The civil service plays an important role in the development of a country. Thus the competence and motivation of civil servants matter. An online survey of civil servants conducted by CRRC-Georgia for NATO-PDP in December 2015 – January 2016 was one of the first attempts in Georgia to study civil servants’ perceptions of and attitudes towards their job. This blog post provides a brief overview of some of the findings, focusing on reported reasons for choosing to work in the civil service, the advantages and problems civil servants see with their jobs, as well as general assessments of civil servants’ motivation to work.

Slightly over a half of civil servants (56%) reported that the main reason they chose their job was an interest in working in the public sector. Forty-five percent hoped to improve their professional skills. The third most frequently named reason was a hope to improve the situation in their field. Importantly, a rather small share of civil servants (18%) reported a “stable job” as a reason for choosing to work in the civil service, and only 2% named an “attractive salary”.

About half of civil servants named the opportunity to contribute to the development of the country as the main advantage of working in the civil service. The opportunity to acquire new professional skills was the second most frequent answer, while the opportunity to make new connections, work one’s way up within the organization, and work with competent colleagues were named rarely.

Civil servants most frequently assessed the motivation to work of those in the civil service as average (50%). Positive assessments, though, are much more frequent than negative ones (36% vs 15%).

Note: To a certain extent, in response to most of the questions in this survey, civil servants tended to pick answers that can be considered socially desirable. Hence, social desirability bias is likely to have affected other responses as well, including assessments of other civil servants’ motivation to work. In order to avoid this bias in the case of this question, a very general wording was used: “How would you assess civil servants’ motivation to work?” This question measures civil servants’ reported perceptions of their colleagues’ motivation. To a certain extent, social desirability bias likely still influenced responses. However, this influence should be less than if the question had been asked about the respondent herself. 

Should the 50% of “average” assessments be considered a problem? Probably. The state invests financial resources in the improvement of civil servants’ professional skills, and the country, overall, is interested in a high productivity of their work. Undoubtedly, motivation encourages productivity. Thus, higher motivation will also lead to a more efficient use of public resources.

While trying to increase civil servants’ motivation in Georgia, it is important to consider the problems they face. The most frequently named problem is a lack of professionally competent civil servants. A fear of losing one’s job and poor infrastructure come in second and third, followed by a fair number of other problems.

Addressing these problems may improve civil servants’ motivation to work. As a result, the country would benefit from higher productivity among civil servants.

Proposed Reform Could Tilt Electoral Field Toward Incumbents

Irakli Kobakhidze, Speaker of Georgian Parliament, recently outlined proposed constitutional changes. Among them is a switch to a fully proportional electoral system, which civil society groups have long argued for. But this possible switch could tamp down on political competition.

This pending reform would produce two major changes besides the nixing of the first-past-the-post component: the first would re-allocate votes for parties that fail to clear the 5-percent electoral threshold (the percentage needed for a party to gain representation in parliament) to the leading party; the second, which is ironic coming from a party that came to power as a coalition, would prohibit parties from forming electoral coalitions. Taken together, some experts have cautioned that the proposed rules-changes could tilt the electoral playing field in favor of the incumbents, and thus would mark a setback for civil society.

In order to test the claim that the proposed reforms could skew democratic development in Georgia, and how the changes might affect future elections, the Caucasus Research Resource Centers calculated how seats would have been distributed among parties in the past three legislative elections.

The CRRC model looks at three variants, including the mixed system that Georgia currently uses, one which distributes seats through a coalition of a party-list vote, and first-past-the-post races. The CRRC model also applies the criteria that the parliament speaker proposed March 21, under which there is only the proportional, party-list vote, along with the re-allocation rule that gives the leading party the votes received by parties that fail to clear the 5-percent hurdle. In addition, the CRRC model shows how MP seats would be distributed on the basis of a proportional-vote system only with a 5 percent threshold, but without the re-allocation provision.

The CRRC model shows that in the 2008 and 2016 elections, during which there was only one strong party in the country, the incumbent party would have ended up with roughly the same number of seats under the current mixed system and the proportional-only system with the re-allocation rule. The incumbents would lose a significant number of seats, yet still retain a safe majority, under the system of proportional voting without re-allocation.

There would seem to be a genuine danger that the proposed rules changes would give the incumbents a decided advantage in a race in which two parties are otherwise evenly matched.

The 2012 election underscores this point. That race, which matched the Georgian Dream against United National Movement (UNM), was close and intense. When the results are run through the CRRC model, the parliament would have almost the same seat allocation under a fully proportional system as under the current mixed system. However, if the votes for parties that didn’t clear the 5-percent hurdle were re-allocated as Speaker Kobakhidze suggested, it would favor the winner, when compared to a proportional system without the re-allocation rule.

While the proportional system Georgian Dream proposes might appear to mark an improvement over the current system in some cases, under circumstances where there is a high level of political fragmentation, such as is currently the case, the changes would provide a significant boost to incumbent authority.

To highlight this phenomenon, a detailed look at the 1995 Georgian parliamentary elections is useful. In the 1995 vote, over 50 parties vied for seats in the legislature and 62 percent of ballots were cast for parties that didn’t clear the 5-percent hurdle, and thus were ineligible for representation in parliament. Had the electoral system in 1995 been the one that the Georgian Dream is currently advocating, rather than 107 seats, the Citizens Union of Georgia would have won 187 seats in what was a 235-member legislature.

The Georgian Dream, which came to office as an electoral coalition, is also proposing a ban on electoral coalitions. This rule in combination with wasted votes being allocated to the winner is likely to further benefit incumbents.

Each party would either have to run independently, or form a new political party to run together in elections. In practice, this rule obstructs electoral consolidation, which often promotes the formation of stable parliaments in a genuinely pluralistic system. If implemented in its current form, it is likely the new rule would increase the number of seats in parliament awarded to the party with the largest share of the vote.

Even without this change, Georgia’s political parties have already been fragmenting in recent years. The Georgian Dream was once a six-party coalition, but now consists of a single large party (the Georgian Dream) and two minor parties (the Conservatives and the Social Democrats). The remaining parties that formed the original coalition are now independent. Meanwhile, the United National Movement (UNM) has broken up into a number of parties, starting with the 2012-2016 parliament, when UNM members split to form Girchi and New Georgia, and more recently, when a majority of the party’s MPs broke off to establish the Movement for Freedom - European Georgia.

Another matter of potential concern is the question of dark money in the electoral system. It’s possible that incumbents, acting through shadowy intermediaries, could potentially provide assistance to small parties in order to draw votes away from potential competitors. This strategy has already been part of political competition in Georgia. When the UNM controlled parliament, for example, the Christian Democrat party was effectively a satellite party. This strategy may have also been at play in some of the splits from the United National Movement. Both Girchi and New Georgia, after splitting off from the UNM, were able to immediately open up a large number of offices throughout the country. It remains unclear where the money came from to afford such a significant expense.

The proposed electoral reforms could face opposition from civil society, and President Giorgi Margvelashvili could veto them. However, the Georgian Dream holds a constitutional majority in Georgian parliament, meaning it could overturn a veto, as MPs did in response to past vetoes.

For Georgia’s democratic political system to become stronger, the consolidation of parties, not further fragmentation, is needed. The proposed changes to the electoral system are unlikely to encourage consolidation, and instead seem to provide lots of incentives to encourage the continued fragmentation of the political landscape. At best, the proposed changes are two steps forward and one step back. At worst, they could squash political competition in Georgia.

To view the data used in this article, click here.

[Note: This post was originally published on Liberali in Georgian and on Eurasianet in English. Dustin Gilbreath is a Policy Analyst at CRRC-Georgia. David Sichinava is a Senior Policy Analyst at CRRC-Georgia.]

State capacity in the South Caucasus: How do you measure how much the state can do?

State capacity is a concept which has gained wide interest from political scientists in recent years as an important concept for economic development and regime classification, yet it still lacks agreed upon definitions and indicators. Its definitions vary, with different scholars highlighting different aspects of the concept based on their angle on the subject, but some definitions of state capacity are broader than others. A good example of a broad definition of state capacity is “the state’s ability to implement public policy” (Rogers and Weller, 2014).

The lack of agreement on indicators and definitions is due to the inherent multidimensionality of the concept. This multidimensionality is well exemplified by Fjelde and De Soya’s 2009 article which identifies state capacity as a state’s ability to coerce, co-opt, and cooperate with society. While the authors provide indicators for these capacities, their schema seems more to describe a state’s relationship and interactions with citizens rather than state capacity in and of itself.

The fact that different scholars have theorized different capacities including fiscal capacity, bureaucratic-administrative capacity, and coercive capacity as component parts of state capacity further illuminates the multidimensionality of the concept. This blog post looks at three of the many possible indicators which could be used to gauge state capacity in the South Caucasus: revenue excluding grants as a share of GDP for fiscal capacity, taxes on income, profit, and capital gains as a share of total revenues for bureaucratic-administrative capacity, and military expenditures as a share of central government expenditures for coercive capacity. So, how strong are the South Caucasus states?

Fiscal capacity is considered one of the most important state capacities by most authors as without the financial means to accomplish a stated policy, that policy will likely never be realized in practice. The graph below presents World Bank data for state revenue excluding grants as a share of GDP and shows how much the South Caucasian governments collect from their societies. What appears most prominently is that Azerbaijan’s fiscal capacity far outstrips that of Georgia and Armenia, which exhibit similar levels of extraction. It is important to keep in mind here that revenue consists not only of taxes but also funds collected through fines, fees, and resource rents. The latter are particularly important for Azerbaijan as the government received 54% and 65% of state revenues from oil and gas in 2005 and 2011 respectively. Without its oil wealth, Azerbaijan would collect significantly less in revenues.

Definitions of bureaucratic-administrative capacity often center on a state’s ability to collect and manage information (Hendrix, 2010). This capacity is central to a state’s ability to act and likely enables a state to have fiscal and coercive capacity. For example, if a state is unable to gather information on potential militants within its territory it will be unlikely that it can coerce or co-opt them into compliance. In order to successfully cooperate with society, information gathered must be channeled into usable and comprehendible forms which enable the government to act.

Income, profit, and capital gains taxes as a share of total taxes are a useful indicator of bureaucratic-administrative capacity. While at first glance it may be taken to indicate fiscal capacity, income taxes are more closely related to bureaucratic-administrative capacity, because this form of taxation is both a relatively difficult and relatively desirable tax to collect (Rogers and Weller, 2014). The desirability of income tax stems from the fact that it generally provides a revenue stream which does not drastically fluctuate. In most circumstances, however, it is a relatively difficult tax to collect (though the system of income tax payment by employers has lowered this difficulty in Georgia, Transparency International Georgia has noted that non-compliance with income tax remains problematic). As such, the share of income tax as a percentage of total state revenues proxies how well a state can extract from and manage information on its population. The graph below presents taxes on income, profits and capital gains (two other taxes which are similar to income tax) as a percentage of total taxes collected. The graph demonstrates that Georgia’s bureaucratic-administrative capacity on this measure is higher than that of Armenia or Azerbaijan. While Azerbaijan’s relative weakness in this sector is likely caused by hydrocarbon revenues, Georgia’s relative strength likely comes from the reforms in tax collection and enforcement, which started with the tax code passed in 2005.

A final important capacity of state is its ability to coerce its population; without the capability to put down paramilitaries or suppress violent groups, a state can quickly devolve into chaos. Taking military expenditures as a share of central government expenditures as an indicator of coercive capacity, the graph below gives a possible indication of coercive capacity. This indicator, though, also likely describes the changing relative importance of coercion to each state over time, as one would expect the share of total expenditures dedicated to military expenditures to increase if security issues became relatively more important – hence Georgia’s relatively high expenditures in 2008, which are largely a result of the 2008 August War with Russia. When looking at the figures, it is important to note that Azerbaijan’s budget is significantly larger than either Georgia’s or Armenia’s and as such has a much larger absolute level of coercive capacity.

This blog post has looked at three of the many possible indicators of state capacity. For readers interested in the subject, this 2010 article by Cullen Hendrix goes through a wide variety of indicators, although the data set used does not include any of the South Caucasus countries.

Have any ideas about other indicators? Join the conversation on Facebook or at CRRC-Georgia’s office on December 10th for the Works-in-Progress talk: State/party capacity and constraints on state action: Operationalizing and indexing state capacity in Georgia and Armenia.

Georgia Corruption Data | Now Available

Recently, a nuanced article in an Indian magazine discussed "How Georgia Did It" to get rid of corruption. This has, of course, been a topic of extensive debate in India. It's good to see that lessons are being drawn from the Georgian case, and that they travel beyond the immediate neighborhood.

The article cites a broad number of participants in the reforms, quotes Transparency International, and also refers to CRRC's research on Judicial Independence. Find the link to the article here.

On the theme of battling corruption, CRRC recently contributed some data analysis to a World Bank report that summarizes the Georgian lessons in the following way:

"From the case studies, 10 factors emerge that help explain Georgia's achievements to date: exercising strong political will; establishing credibility early; launching a frontal assault; attracting new staff; limiting the state's role; adopting unconventional methods; coordinating closely; tailoring international experience to local conditions; harnessing technology; and using communications strategically. While many of these factors may seem obvious, the comprehensiveness, boldness, pace, and sequencing of the reforms make Georgia's story unique."

Comparatively little data was cited in the report (link is here), but our Caucasus Barometer data certainly corroborates that there are huge regional differences.

To give good access to our data, we have now made a collection available on our website – more than 80 pages of tables, that offer a comprehensive overview over the years. This includes data from CRRC and other organizations, and thus should be a useful resource. To access this data collection, please click here. 

Comments? Let us know.

Financial Sector Snapshot - Armenia

A special issue of the Armenian Journal of Public Policy (published by AIPRG, with CRRC's Heghine Manasyan as one of the Editors) is devoted to Financial Sector Development. All the papers are engaging for non-specialists.

Snapshots:

• the estimated 2004 after-tax earnings of ALL Armenian banks is around 18,5 million USD (which, almost needless to say, is very low by comparison)
• given that banks are small, they can only serve small or medium-sized enterprises (which in turn often cannot meet the underwriting standards)
• a major impediment to growth of deposits is the fear of the tax police (although their actual rights are limited)
• there exist around 500 000 accounts in Armenia, almost all located in Yerevan

(Source: Financial Sector Assessment of Republic of Armenia, Emerging Markets Group, under contract to USAID 2005)

All of this matters to development and the ability of those without access to networks of wealth and power to become successful entrepreneurs (see the post below, on Douglas North).

Given the low earnings, one recalls the joke about the Bata Shoe Factory representative being sent to southern India on a market study. The first representative comes back, dejected, saying "we don't have a chance there, they all go barefoot." A second one goes out, calls back from a payphone and says "HUGE opportunities! Millions of potential customers!"

So what do the low earnings tell us? Are they a symbol of opportunity, or a symptom that nothing goes?

Ideas on this, and much more, in the Armenian Journal of Public Policy's special issue of December 2005.