Lunch Seminar: Practical Economics - Economic Transformation and Government Reform in Georgia 2004-2012: A conversation with Nika Gilauri, Georgia Prime Minister (2009-2012)


Friday, February 17, 2017, 12:00pm to 1:00pm


NEW LOCATION: Malkin Penthouse, 4th Floor Littauer, HKS

Speaker: Nika Gilauri, former Prime Minister of Georgia

Nika Gilauri will present his book, Practical Economics, in which he provides a detailed analysis of the reforms made in Georgia.Nika Gilauri

The book starts by discussing why the Georgian case is exemplary for other countries and proceeds to describe the fight against corruption, the rightsizing of government, the creation of a business-friendly environment, tax and customs reform, the privatization of state-owned enterprises, energy sector reforms, and smart spending approaches applied to welfare, healthcare, education, and procurement. In some cases, the description draws on the experiences of other countries, either because they served as an inspiration for Georgia’s reforms or because approaches pioneered in Georgia were successfully applied there.

In a nutshell, this book is an attempt to answer one question: how do you manage a transformation to bring about fast and sustainable growth? In what follows, Mr. Gilauri approaches this question from two angles:

  • What is the right size for a government, both in terms of its regulatory footprint and in terms of its budget in relation to the size of the economy?
  • How do you ensure a government’s efficiency in terms of its decision making, its interaction with the private sector, its financial flows, and the services it provides?

The book concludes with a discussion of leadership, in recognition of the fact that even the best approaches would not apply themselves. It takes determined leadership to make them work – the courage to fix what is broken, to try innovative approaches, and to learn from one’s mistakes. 

So is this a book for leaders only, for heads of state and government? Far from it. There is something here for everyone who takes an interest in public affairs – politicians, civil servants, consultants, and all active citizens who may be interested in how governments function and how they can be transformed. This book also shows that none of the major economic theories stands the test of practical application. Some people believe that the state should redistribute wealth from the rich to the poor. Others believe that the freedom of enterprise is more important. Many believe that a monetarist approach is the best solution to the world’s economic problems, while others favor Keynesian economics. In author’s experience, none of these theories is universally applicable. Every given economic problem requires its own solution. This is why he advocates what he calls Practical Economics. Practical Economics is about finding the right mix of economic policies for a given country at a given moment. This book is about the mix of economic policies that transformed the Georgian economy between 2004 and 2012. While some of these policies may not be applicable to any other country, the book makes the case that many of them are relevant for many countries, developing as well as developed, today.