Accepted paper:

The Institutions of the State-Business Relations in the Food and Agriculture sector of Georgia

Author:

Tamar Jugheli (University of Groningen)

Paper abstract:

The research paper aims to understand the institutions and effectiveness of State Business Relations (SBRs) in the food and agriculture sector of Georgia. Agribusiness (including fruits and vegetables, hazelnuts, wine) is perceived to be among the high potential industries for Georgia's economic growth prospects. Since 2010, the agriculture sector of Georgia is the target of the state intervention in order to support the growth of investment, production, and export in the sector. Considering the prominence of the effective SBRs for effective state intervention, this research aims to understand the characteristics/forms of SBRs and its adaptive efficiency in the food and agriculture sector of Georgia. Understanding how SBRs evolve over time will help to understand their adaptive efficiency (North, 1993;) as well, meaning their flexibility to be changed or replaced in response to the political and economic feedback. The analytical framework of the research relies on the institutionalist approach to SBRs (North, 1993; Amsden, 1989; Schneider & Maxfield, 1997; Evans, 1998; Rodrik, 2004:). The forms of interaction between state and businesses might range from formal, highly organized (regular co-ordination arrangements) to informal (ad hoc) interactions (te Velde, 2013;). The state interventions to promote growth, it is necessary to identify constraints for restructuring and to understand what types of interventions are most likely to remove them, therefore, the strategic collaboration between state and private actors might serve this aim (Maxfield & Schneider, 1997; Rodrik, 2004;). If the state and businesses fail to collaborate or engage in collusive relations, state intervention might be beneficial only for few actors and be harmful to the others, hence, will not contribute in growth (te Velde & Sen, 2009;). This research assesses the effectiveness of SBRs in the food and agriculture sector of Georgia based on the following criteria: information exchange mechanisms, reciprocity, and credibility between state and private actors (Maxfield, & Schneider, 1997;). The research is based data from interviews conducted with the representatives of umbrella organizations, businesses, state agencies, research, and international donor organizations. The paper will contribute to the academic literature on the role of institutions of state business relations for economic development. The structure of the research paper is as follows: 1. Introduction; 2. State intervention in the food and agriculture sector of Georgia 3. Analytical framework; 4. Institutional of SBRs in the food and agriculture sector of Georgia; 5. The adaptive efficiency of SBRs; 6. Conclusion;

panel POL-03
State Regulation and Policy