Public Expenditures on Education and Health in Georgia before and during the Global Crisis

After years of stagnation and political cataclysms, Georgia tried to recover by launching radical economic and political reforms starting in 2004. The results of the reforms appeared to be impressive. The country’s GDP has more than doubled; the total volume of bank deposits is five times what it used to be. Key international indices (Doing Business Index, Economic Freedom Index, Corruption Perception Index) have also reflected the success of the reforms. The occupation of the Georgian territories by Russia in August 2008 and the global financial crisis have significantly changed the current macroeconomic environment in Georgia. The August conflict undermined investor and consumer confidence, put pressure on public finances, damaged physical and other infrastructure and undermined the banking system with a large volume of deposit withdrawals. The deepening of the international financial crisis put further pressure on currency and foreign investments. The purpose of this paper is to consider the nature and magnitude of the impact of the global financial crisis on Georgia’s social services sector and on the country’s economy as a whole. The global financial crisis had a sharp impact on the most disadvantaged members of the society. The main objectives of the paper are to describe to what extent the education and healthcare sectors were affected in Georgia and to investigate how government policies have addressed the problems which arose due to the financial crisis.Georgia, Education, Health Care Sector, Public Service Delivery, Development During the Financial Crisis, Financial Crisis in Georgia, Georgia’s education sector, Georgia’s health sector, Georgia’s macro indicators, Financial aid

Toothless Reforms? The Remarkable Stability of Female Labor Force Participation in a Top-Reforming Country

Low Female Labor Force Participation (FLFP) constitutes a foregone opportunity at both the macro and at the micro levels, potentially increasing the vulnerability of households and lowering the long-run development perspectives of a country. Most international organizations and national policy makers see low FLFP as a serious issue that needs to be addressed by adopting appropriate policies. We investigate the possible reasons of the remarkable stability of FLFP in a top-reforming upper-middle income country. Our goal is to in disentangle the different forces at work and to draw useful lessons for the design of participation-enhancing policies. Using data from a nationally representative Household Survey covering the period 2003-2015, we employ Blinder-Oaxaca (Blinder, 1973 and Oaxaca, 1973) type decomposition to decompose changes over time in FLFP levels into parts that are due to changes in observable factors versus changes in the strength of impact of these factors. This allows us to identify possible shifters of the FLFP rate and propose areas of special interest for policy making. We show that the stability of FLFP in Georgia during the period 2003-2013 is due to offsetting socio-economic changes taking place in the country, and that the increase in the last period covered by our dataset – 2013-2015 – can be attributed to the emergence of new labor opportunities for women. We conclude that, while useful, supply-side economic reforms are not sufficient to increase FLFP and need to be complemented by demand-side policies aiming at creating more and better work opportunities for women

Public Expenditures on Education and Health in Georgia Before and During the Global Crisis

After years of stagnation and political cataclysms, Georgia tried to recover by launching radical economic and political reforms starting in 2004. The results of the reforms appeared to be impressive. The country's GDP has more than doubled; the total volume of bank deposits is five times what it used to be. Key international indices (Doing Business Index, Economic Freedom Index, Corruption Perception Index) have also reflected the success of the reforms. The occupation of the Georgian territories by Russia in August 2008 and the global financial crisis have significantly changed the current macroeconomic environment in Georgia. The August conflict undermined investor and consumer confidence, put pressure on public finances, damaged physical and other infrastructure and undermined the banking system with a large volume of deposit withdrawals. The deepening of the international financial crisis put further pressure on currency and foreign investments. The purpose of this paper is to consider the nature and magnitude of the impact of the global financial crisis on Georgia's social services sector and on the country's economy as a whole. The global financial crisis ahd a sharp impact on the most disadvantaged members of the society. The main objectives of the paper are to describe to what extent the education and healthcare sectors were affected in Georgia and to investigate how government policies have addressed the problems which arose due to the financial crisis