Growing Apart? A Tale of Two Republics: Estonia and Georgia

30 Pages Posted: 18 Dec 2008  

Thorvaldur Gylfason

University of Iceland - Faculty of Economics and Business Administration; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Eduard Hochreiter

International Monetary Fund (IMF); Joint Vienna Insitute

Multiple version iconThere are 2 versions of this paper

Date Written: October 2008

Abstract

We compare and contrast the economic growth performance of Estonia and Georgia since the collapse of the Soviet Union in 1991 in an attempt to understand better the extent to which the growth differential between the two countries can be traced to increased efficiency in the use of capital and other resources (intensive growth) as opposed to brute accumulation of capital (extensive growth). On the basis of a simple growth accounting exercise, we infer that advances in education at all levels, good governance, and institutional reforms have played a more significant role in raising economic output and efficiency in Estonia than in Georgia which remains marred by various problems related to weak governance in the public and private spheres.

Keywords: Economic growth, Estonia, Georgia, Governance, Transition economies, Education, Economic reforms, Exports, Inflation, Labor markets

Suggested Citation

Gylfason, Thorvaldur and Hochreiter, Eduard, Growing Apart? A Tale of Two Republics: Estonia and Georgia (October 2008). IMF Working Papers, Vol. , pp. 1-28, 2008. Available at SSRN: https://ssrn.com/abstract=1316703

Thorvaldur Gylfason

University of Iceland - Faculty of Economics and Business Administration ( email )

IS-101 Reykjavik
Iceland
+354 525 4533/00 (Phone)
+354 552 6806 (Fax)

HOME PAGE: http://www.hi.is/~gylfason/inenglish.htm)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Eduard H. Hochreiter

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Joint Vienna Insitute ( email )

Mariahilferstrasse 97
Wien, A-1090
Austria
0043-1-7989495-55 (Phone)

HOME PAGE: http://www.jvi.org

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