1st Edition
Unravelling The Persistence of Dollarization The Case of Georgia
This volume engages with the roots, dimensions, and implications of foreign currency domination in states with a national currency. Referred to as unofficial dollarization in literature, this is a worldwide phenomenon among developing countries and has a long history.
This monograph provides a political economic analysis of dollarization in Georgia and is structured around three themes: the genesis of dollarization (1991–2003), the persistence of dollarization (2003–12) and the politicization of dollarization (2012–19). The case of Georgia is especially representative of the post-socialist transition states, but also has wider applicability.
A high level of dollarization is a significant barrier to economic growth, macroeconomic and political stability, functional monetary policy, as well as social welfare. The Covid-19 crisis and the increasing debt of developing countries in foreign currency exacerbate dollarization-related vulnerabilities for these economies.
This book will be of interest to postgraduate students in global/comparative political economy, development economics or transition economies, researchers in monetary sovereignty, central banking, exchange rate policies, currency hierarchy, money, financialization, and policy makers in dollarized countries and global institutions.
Contents
List of Figures, Tables, and Timelines
List of Abbreviations
Acknowledgements
Part I: Dollarization and its Discontents
1 Why does Dollarization Matter and What is at Stake?
2 The Obscurities of Dollarization
Part II: The Genesis of Dollarization
3 Dollarization within the Agenda of Dollar Diplomacy and Transition
4 The Georgian State as a Vessel of Dollarization
5 Hyperinflation: The Origins of Dollarization and the Birth of the Lari
6 A New Financial System Meets Dollarization
Part III: The Persistence of Dollarization
7 The Birth of the New Georgian State
8 Financialization and The Persistence of Dollarization
Part IV: The Politicization of Dollarization
9 The Politicization of Dollarization: The Currency Crisis Unfolding
10 Conclusion
Index
Biography
Ia Eradze is a researcher at the Institute for Social and Cultural Studies, Ilia State University, Tbilisi. She is also a fellow in the Legacies of Communism research network, which was initiated by the Leibniz Centre for Contemporary History in Potsdam (ZZF). Her area of research is political economy and historical evolution of finance in the post-socialist space. Her most recent pieces include Financialization of Monetary Policy in a Dollarized Economy: The case of Georgia, https://doi.org/10.1093/cje/beac019 Cambridge Journal of Economics and Taming Dollarization Hysteresis: Evidence from Post-socialist States, which will appear in an edited volume (Edward Elgar Publishing).
“Ia Eradze’s book represents a milestone in the study of the dollarization of a transition economy. She has demonstrated that dollarization cannot be derived solely from the calculations of utility-maximizing individuals, but that its dynamics must be understood in terms of the interplay of modes of accumulation, institutional structure, social power relations and prevailing ideas. Ms. Eradze has presented a political-economic work in the truest sense.”
Prof. Dr. Christoph Scherrer Director, International Center for Development and Decent Work, University Kassel, Kassel
