WiP: The Impact of the Aid Wind-Fall on Political Regime Dynamics in Post-War Georgia. Tbilisi, Georgia, May 15 – Levan Tsutskiridze

CRRC, American Councils and ARISC are proud to present the 14th talk of the Works-in-Progress Series for the Spring 2013 Season!
Levan Tsutskiridze, CSS

“The Impact of the Aid Wind-Fall on Political Regime Dynamics in Post-War Georgia”
Wednesday, May 15, 2013 at 6:15pm

ISET/CRRC Georgia, Zandukeli St. 16, Tbilisi, GEORGIA 

Abstract: This project will investigate the impact of foreign aid that was pledged by international donors after the 2008 conflict with Russia. While the literature examines both economic and political implications of increased aid inflows, this project will focus on effects on the latter: the political regime in Georgia. Since independence, the country was a regular recipient of the Official Development Assistance (ODA). In 2008, however, the amount of aid more than doubled that received during the previous years. The reason was the conflict with Russia. International donors pledged over 4.5 billion USD to support development and post-conflict recovery.  This money was distributed over 5 years. Therefore, from 379 million USD in 2007, the amount of aid money increased to about 887 million USD in 2008, and to 907 million USD in 2009. Throughout the following years, it remained higher than in the pre-conflict period, but lower than in the 2008-9. Therefore, these two years will be crucial for this research project. Concern over the high amount of aid flows and additional wind-falls of aid was expressed by various critics. They point to sub-Saharan Africa and other aid-dependent countries, and argue that due to its high share in countries’ economies, low-income countries are not able to absorb such aid. Therefore, by analyzing panel data from those countries, they point out the negative impact of aid on the developmental outcomes and question the very essence of the aid – its effectiveness. Elliot Berg, for example, suggested that aid begins to have negative effects on local institutions when aid flows reach 5 percent of GDP, which would mean that in 2008 (7%), 2009 (8.5%) and 2010 (5.5%) Georgia crossed this threshold. On the other hand, proponents of the foreign assistance acknowledge these problems and suggest dealing with them through ‘conditionality’ and ‘selectivity’. This research project will challenge these views by analyzing Georgia’s national data on the macro level in order to try to show that there was neither positive nor negative impact on political regime development. On the other hand, it will also suggest that the aid helped the government to maintain power.

Levan Tsutskiridze is a MA student at the Tbilisi State University in theTransformation in the South Caucasus program that is administered by the Center for Social Sciences.
W-i-P is an ongoing academic discussion series based in Tbilisi, Georgia, that takes place at the International School of Economics (ISET) building (16 Zandukeli Street). It is co-organized by the Caucasus Research Resource Centers (CRRC), the American Councils for International Education: ACTR/ACCELS, and the American Research Institute of the South Caucasus (ARISC). All of the talks are free and open to the public.The purpose of the W-i-P series is to provide support and productive criticism to those researching and developing academic projects pertaining the Caucasus region.Would you like to present at one of the W-i-P sessions? Send an e-mail to natia@crrccenters.org.