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Institutional Analysis of Agricultural Land Privatization in Post-Soviet Georgia

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Institutional Analysis of Agricultural Land Privatization in Post-Soviet Georgia Quick and dirty: Institutional analysis of agricultural land privatization in Post-Soviet Georgia Dissertation Zur Erlangung des akademischen Grades doctor rerum agriculturarum (Dr. rer. agr.) Eingereicht an der Lebenswissenschaftlichen Fakultät Humboldt-Universität zu Berlin Von MSocSc Anna Buschmann Präsidentin der Humboldt-Universität zu Berlin Prof. Dr.-Ing. Dr. Sabine Kunst Dekan der Lebenswissenschaftlichen Fakultät Prof. Dr. Bernhard Grimm Gutachtachter: 1. Prof. Dr. Daniel Cole 2. Dr. Ilona Otto Tag der mündlichen Prüfung: 10.12.20 https://doi.org/10.18452/22247 ii Zusammenfassung Die Studie erforscht institutionalle Arrangements, die auf eine Privatisierng des Agrarlands in der Republik Georgien abzielen, deren Formalisierung der Eigen- tumsrechte den letzten Schritt der Agrarreformen darstellen, und speziell, wie sich die Durchsetzung des Rechts auf Privateigentum entwickelt hat. Laut Schätzun- gen ist bisher nur ca. ein Drittel des Landes registriert. Das Ziel der Analyse dient dem Verständnis, wie sich politische Reformen, die eine Privatisierung des Ag- rarlands beabsichtigen, auf den Landbesitz allgemein und die Agrarproduktion im Besonderen auswirken. Anhand von zwei der führenden landwirtschaftlichen Ex- portprodukte – Haselnuss und Wein –, verfolgt die Studie methodologisch einen abduktiven Forschungsansatz, der von Triangulation geleitet ist. Die Ergebenisse basieren auf einer Umfrage, Fokusgruppen-Interviews mit Agrarproduzenten so- wie Interviews mit Leitern verarbeitender Betriebe, Repräsentanten der Regie- rung sowie Experten. Die Ergebnisse zeigen einerseits, dass Nutzungs- und später Eigentumsrechte konstant kraft einer ‚property rule’ durchgesetzt wurden, und somit einen Status quo gesichert haben, der besonders die Mitglieder ehemaliger einflussreicher (lokaler) Regierungskreise begünstigt hat; demgegenüber haben die Reformen kontinuierlich Unsicherheit unter der Landbevölkerung erzeugt – indem die Durchsetzung privater Eigentumsrechte von einer ‚property rule’ hin zu einer ‚liability rule’ verändert worden ist –, während die erforderlichen Kosten zur (Wieder-)Erlangung der Besitzansprüche zunehmend den ehemaligen Rechts- inhabern aufgebürdet worden ist. Die Ergebnisse lassen eine potentielle Umver- teilung in Form konzentrierten Landbesitzes vermuten, während die Mehrheit der Betriebe künftig auf die Durchsetzung von Landnutzungsrechten vertrauen darf, um ihre Subsistenzwirtschaft fortzuführen. iii Abstract This study focuses on the institutional change of agricultural land privatization in the Republic of Georgia, where the formalization of private property rights forms the last step of the agrarian land reforms, and specifically how people’s entitle- ment to land has been protected over time. It is estimated that so far only about a third of the land has been registered. The aim of the analysis is to understand how political reforms targeting land privatization have affected land ownership, and to show the effects on agricultural production. By focussing on two leading export products of Georgian agriculture – hazelnut and wine – the study methodologi- cally follows an abductive research strategy led by the principles of triangulation. It is based on survey data, focus groups interviews with agrarian producers as well as interviews with processors, government representatives and experts. The re- sults reveal, on the one hand, that by constantly enforcing use and then ownership rights according to a property rule maintained a status-quo which has mainly fa- vored former influential (local) government circles; in contrast, the reforms have persistently generated insecurity to rural neighborhoods – by changing the en- forcement of people’s private ownership rights from a property rule to a liability rule –, while the emerging costs to (re-)claim ownership were increasingly shifted to the former right holders who can hardly raise the required financial means. The results suggest a re-distribution of land in the form of a rising concentration of land ownership, while the majority of agricultural producers may rely on the granting of use-rights to proceed with their subsistence farming in the future. iv Acknowledgements Thank loads to Prof. Konrad Hagedorn, Prof. Daniel Bromley and Prof. Dan Cole who supported and helped to realize the idea of this project. Thanks to my Oti who always believed in me and this project. Many thanks to Brijesh Bhatt for mutual help and steady support. On the Georgian side – though impossible to list all the people that I owe thank to – many thanks to Irma Gogoshvili for her translation, time, trust, crea- tivity and fun during our field visits. Moreover, many thanks to Ana Gogokhia, Mariam Kobaladze, Salome Mekhuzla, Eka Meskhidze, Marina Muskhelishvli, Patima Mamardashvili, Ada Nardaia, Lika Qobalia, Lika Tchanturia, Nia Zaran- dia as well as Beka Gonashvili, Bidsina Giorgobiani, David Aliashvili, Paul Batth, Lasha Dolidze, Gia Gvilava, Shota Metreveli, Zurab Ramazashvili and Soso Salukvadze for their time and efforts by providing information, establish- ing contacts, giving local and mental support as well as technical assistance, or e.g. housing in Mingrelia (what a funny time, thanks so much). For organizational and technical assistance, I owe many thanks to Sigrid Heil- mann, Ines Jeworski, Renate Judis and Petra Stykow, as well as Alex Antoniuki, Juan Echanove, Jacques Fleury, Christopher Hank, Rainer Kaufmann, Vincent Morabito, Koba Turbanidze, Irhan Kent, Eric Livny and Roland Sander. The research had been impossible without emotional support and musical sponsorship by Moritz Eichholz, as well as the backing of Ruhi Gandhi, Agnese Sofija Kusmane, Janne Wachsmuth, Kian Siemens and Sven Wilkens. Many special thanks for their love and patience to my mum, her spouse, Ralf, my sisters, Thea and Lisi, as well as to the loveliest, greatest and wittest man- with-the-nerves-of-steel, Dr. Kenneth Wayne Richards. CONTENTS Zusammenfassung ............................................................................................... ii Abstract ............................................................................................................... iii Acknowledgements ............................................................................................. iv CONTENTS ......................................................................................................... v List of Figures ................................................................................................... viii List of Tables ........................................................................................................ x List of Abbreviations .......................................................................................... xi 1 INTRODUCTION ...................................................................................... 13 1.1 Initial interest to study the phenomenon ............................................ 13 1.2 Previous studies ..................................................................................... 15 1.3 Land privatization examined through the lenses of Public Choice and New Institutional Economics ........................................... 24 1.4 Research questions and aims of the study .......................................... 32 1.5 Organization and structure .................................................................. 34 2 TOOLS OF THE GAME: METHODS AND RESEARCH DESIGN ....................................................................................................... 37 2.1 Methods .................................................................................................. 37 2.1.1 Scientific logic and reasoning ............................................................. 37 2.1.2 Grounded Theory ................................................................................ 38 2.1.3 Data analysis by the use of Atlas.ti ..................................................... 40 2.1.4 Triangulation and mixed methods approach ....................................... 41 2.2 Explorative quantitative survey ........................................................... 44 2.2.1 Stratified sampling among Georgian farmers ..................................... 44 2.2.2 Data analysis by the use of SPSS ........................................................ 45 2.2.3 Limitations .......................................................................................... 46 2.3 Qualitative fieldwork: Case study design ........................................... 47 2.3.1 Selection of agri-produces and study sites .......................................... 47 vi List of figures 2.3.2 Overview of case studies..................................................................... 50 2.3.2.1 Case study I: Wine (Kakheti) .......................................................... 52 2.3.2.2 Case study II: Hazelnuts (Samegrelo) ............................................ 54 2.3.3 Limitations .......................................................................................... 57 3 THEORIES ON CHANGING THE RULES OF THE GAME ............. 59 3.1 Institutions ............................................................................................. 59 3.1.1 Norms and conventions ....................................................................... 59 3.1.2 Working rules ...................................................................................... 60 3.1.3 Property relations (or entitlements) ...................................................
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