The Role of Social Capital in Rural Community Development in Georgia

1. The Role of Social Capital in Rural Community Development in Georgia Centre for Social Studies 2011-2012

2. The Research Team • Prof. Marina Muskhelishvili – political science • LikaMezvrishvili – sociologist • BekaNatsvlishvili – political science • Eveline Baumann (IRD, France) – socio-economist, consultant

3. The Research Question The descriptive part: 1. What kinds of cooperative activities can be observed in Georgia? 2. What are the patters of cooperation? How intensive, rigorous and persistent are these patterns? The analytical part: 1. What are the economic, political and cultural factors that support or hamper cooperative activities? What is their comparative importance? 2.Which of these factors can be considered as part of the notion of social capital? 3. What can be done to foster cooperation?

4. Sequence of action • First year of the research: descriptive study of practices: visiting villages, talking with experts and stakeholders, focus groups with the members of cooperatives. Main hypothesis to be formulated by the end of the year; • Second year of the research: deeper insight in 20 communities, selected during the first year of research. The sample will include specific and typical cases/villages.

5. Main concepts in use • Social capital is a somehow vague term; we are studying cooperation, its patterns and factors first of all. • Cooperation is also a vague term; it has many forms, including such different ones as market relations and collective action. We concentrate mostly on problems linked to collective action. • The main problem of rural development is extremely low economic productivity, especially in agriculture, so we study mostly those forms of cooperation which are economically relevant, especially for agriculture.

6. Background • The Post Soviet transformation of Georgian agriculture sector was very radical and rapid: "Georgia is unique among the former Soviet republics in having allowed total paralysis of the collective and state sector both in primary agriculture and in agro-industries" (World Bank, 1996). • Land privatization resulted in a creation of numerous households owning small plots of land; more than the half of the population is considered being self-employed on these plots. • Most households are occupied with subsistence agriculture, selling only about 20% of their output. • “By organising themselves in co-operatives, Georgian small farmers could exploit economies of scale and increase their capacity to compete in a larger market.” (Per Eklund, 2010)

7. Observations so far:a. Traditional forms of cooperation • Traditional patterns of cooperation are more or less similar in all Georgian villages • Traditional patterns of cooperation include: collective pasturing, helping each other on a plot (“today I will help my neighbor, tomorrow he will help me”), collecting money for a neighbor in need, etc. Although people report less cooperation than in previous time • These forms of cooperation are all informal • Structure of this cooperation (including information exchange) resembles more web-styled networking than community-based collective action

8. Observations so far:b. New forms of cooperation: cooperatives and associations • New forms of voluntary cooperation are almost absent • Externally promoted associations are not sustainable • When cooperation emerges, mostly the upper strata of villagers engages, so inequality, rather than equality is reinforced • Replication is more widespread than cooperation • Failure of cooperation may be mostly explained by external factors, such as the absence of institutions (contracts, regulation), resources, etc.

9. Hypothesis for the next year 1. There is a strong pre-disposition against inequality in villages • Measured by means of experimental economic games 2. This predisposition works against collective actions requiring some kind of formalised leadership and/or pooling of material resources - Measured by means of surveying

10. Policy implications: In the absence of external regulations and institutional change: • Snowballing as an outcome of replication may facilitate economies of scale more than cooperatives • Land consolidation through voluntary leasing may be more effective than land consolidation through cooperative creation

11. Main question for the theoretical consideration Cooperation = social capital? OR: Is social capital prerequisite allowing for collective economic and/or political gains through cooperation?

12. Modeling Post-soviet reality: an hourglass as a model of structural differentiation State Society