Political Economy of Old-age Pension Reforms in Georgia

Abstract

The paper examines the factors that played a major role in development of the old-age pension system in Georgia. Based on data collected from 1991-2009, this analysis centers on the system’s patterns of development and identifies four main attempts to reform the old-age pension system. Economic performance, demographic aging, domestic political constellations, and external influence are traditionally thought to be responsible for the pension system reforms. Qualitative data analyses and in-depth interviews have been used to test these explanations. This analysis did not confirm the hypotheses, but it revealed that fiscal constraints and international technical assistance were the main factors behind reforms during the first two chronological attempts to change the system. Political factors and liberal economic ideology influenced the patterns of old-age pension policy development from 2004–2008, while the negative outcomes of the Russian-Georgian War and World Financial Crisis are currently the major obstacles for comprehensive pension reforms. The limitations of this study suggest that in order to clarify the exact nature of old-age pension system, shorter time periods and separate reform initiatives should be investigated.