Liberalism and shadow interventionism in post-revolutionary Georgia (2003–2012)

In: Caucasus Survey
Lela Rekhviashvili aLeibniz Institute for Regional Geography, Leipzig, Germany

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Abel Polese bSchool of Law and Government, Dublin City University, Dublin, Ireland
cTallinn School of Law, Tallinn University of Technology, Tallinn, Estonia
dSchool of Law, Governance and Society, Tallinn University, Tallinn, Estonia

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This article looks at the informal governance practice of Georgia’s post-revolution (2003-2012) reformers. Empirically, we argue that the deployment of informal governance strategies became necessary for the Georgian government precisely because its official liberal reform course was politically constraining and incapacitated it from coping with the social costs of marketization and political-economic crisis. The analysed case, we submit, has major implications for theories of governance and informality. As it stands now, the literature is predominantly preoccupied with improvements in the state’s institutional quality. The Georgian case, in contrast, highlights the importance of institutional design. Utilizing perspectives from Polanyian institutionalist analysis, we problematise the ongoing propagation of market-enhancing institutional design and underline the importance of marketconstraining and social regulation. Arguing that reliance on informality cannot be reduced to profit seeking, or even to formal systemic institutional weakness, we attempt to shift the focus of the literature on governance and institutions from quality of institutional performance back to the once dominant question of development studies, namely the content of institutional design.

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