Salome Topuria

Kurzexposé zum Promotionsvorhaben von Salome Topuria

Progressive Industrial Policy in Open Economies: The Case of Georgia

The economic liberalization processes have been common in Georgia since the collapse of the Soviet Union, however rigorous application of the Washington Consensus agenda started in 2004. Georgia was not the first developing country to implement the set of economic recommendations as provisioned by the Washington Consensus but perhaps it was first in implementing them without any reluctance. The Georgian government has neither an official strategy nor unified policy directives on extremely important issues such as sustainable economic growth, social inclusion, infant industry protection, FDI management, or labor market skill development. The study seeks to recognize that the neoliberal development agenda did not work, rather it resulted in Georgia’s position as a highly dependent, peripheral state with limited capabilities to develop. Therefore, even though scrutinized, the ‘market-oriented formula’ is excluded from further analysis as a development strategy. Instead, the research looks into three taxonomies of industrial policy: mainstream, developmental and progressive, to pinpoint an inclusive development strategy.
The viability of a particular industrial policy cannot be elucidated without first understanding the nature of ‘the state’. Implementation of industrial policy in small, transition countries is not only a matter of a national strategy but it is generally determined by global asymmetries. Therefore, to formulate what kind of sustainable industrial policy Georgia could implement, it is necessary to first understand the nature and capacity of the Georgian state and which international or domestic power constellations influence and constrain its capabilities. This will be done by applying the Regulation School, Varieties of Capitalism (VoC), and Gramscian perspectives to Georgia’s post-Soviet transition period.
The critical examination of mainstream industrial policy illustrates that the role of the state is limited to either narrow economic terms or a mere regulator. The mainstream narrative also tends to be Eurocentric and often synonymous with (re-)industrialization. This study aims to go beyond this parsimony. By using critical theories, including the post-colonial perspective, the research seeks to address not only the necessity of state-led development but more importantly to analyze state-class-capital relations, socioecological dimensions and to revisit the Global North and South argument. In incorporating the state theory and peripheral state, the study elevates the discourse on the economic development of small states beyond the Developmental State Paradigm (DSP). Comprehensive frameworks for progressive industrial policy beyond conventional notions of economic growth and catch-up are explored to address wider structural socioeconomic and ecological transformation. To avoid theoretical abstraction, the methodological part of my research proposes concrete features and dimensions per industrial policy (such as innovation and R&D, social and ecological dimension, free-trade agreements and FDI management, etc.) and closely examines their implementation feasibility in the case study.