Oligarchs and Allocation of Equalizing Transfers in the Republic of Georgia

• In Event: Illiberalism, Secession and Post-Colonialism

Abstract

Post-Soviet leaders have often sought to promote regional development to ensure the stability of their regime. To this end, the executive branch allocates equalizing transfers to eliminate the development gap between the center and the periphery. Existing research on the allocation of these transfers has mainly focused on center-periphery relations, disregarding interest groups that represent specific regions. I argue that regions that are represented by oligarchs and regional leaders in the national legislature receive more funds from equalizing transfers compared to other regions. Using an original dataset for equalizing transfers in 63 municipalities in the Republic of Georgia, I employ a heterogeneous difference in differences/event study design to show how oligarchs and regional interest groups influenced the allocation of equalizing transfers between 2009 and 2020. My results are consistent with my hypothesis, indicating that municipalities represented by oligarchs and regional interest groups receive more funds from equalizing transfers compared to other municipalities.

Author

• Zaur Kapanadze, Texas Tech University