PhD Project: The Political Economy of Unevenness and Industrial Policy in the Post-Soviet Context: The Case of Georgia

Salome Topuria, University of Kassel and HWR Berlin

Supervisors: Prof. Dr. Christoph Scherrer, University of Kassel and Prof. Dr. Hansjörg Herr, HWR Berlin

About

How much room do small, peripheral countries have for industrial strategy under uneven capitalist development? Industrial policy in Latin America and East Asia has been researched extensively, but the post-Soviet space has received far less attention. Dominant approaches to post-Soviet transition tend to explain weak economic performance by domestic institutional deficits or Soviet legacies, and pay little attention to the state, class relations, and the global constraints facing these economies. This dissertation addresses that gap through the case of Georgia. After the collapse of the Soviet Union, Georgia lost most of its industrial base and became a deindustrialized, import- and debt-dependent economy.

The study investigates Georgia’s post-Soviet economic development and asks why transformative industrial policy has never been part of it. To answer this question, it develops a historical materialist framework that brings together uneven and combined development, dependency theory, the Regulation School, and materialist state theory. Grounded in critical realism, the research draws on expert interviews, content analysis of national economic development programs, and archival research, including IMF documents and Georgian-language sources rarely used in English-language scholarship.

The dissertation traces Georgia’s development across three phases, focusing on the formation of a domestic capitalist class and its evolving relationship with the state. In the 1990s, shock therapy and IMF-backed liberalization unfolded alongside economic collapse and the disintegration of Soviet production networks. Domestic capital emerged through politically mediated processes of primitive accumulation, including central bank credit schemes, currency speculation, and privatization that created opportunities for politically connected actors. These processes contributed to an accumulation regime in which rent-oriented interests in finance, import trade, and energy transit gained influence, while productive capital remained weak. After the 2003 Rose Revolution, the new government consolidated this trajectory through a radical program of neoliberal restructuring, encompassing sweeping deregulation, large-scale privatization, and a labor regime that removed basic worker protections and weakened trade unions. Framed as a project of Westernization and a break with the Soviet past, these reforms acquired broad domestic and international legitimacy. Industrial policy was not merely neglected; the government actively dismantled it by closing the responsible department and explicitly rejecting targeted support for manufacturing. Following the change of government in 2012, EU-driven regulatory and trade integration did not alter this development trajectory but normalized it, and Georgia’s dependence on foreign capital, external finance, and remittances persisted.

The dissertation argues that the absence of transformative industrial policy in Georgia is neither a technocratic failure nor a Soviet legacy, but a politically structured outcome of capitalist unevenness. International financial institutions continuously reproduced the neoliberal paradigm through their conditionalities. Domestically, the dominant capital factions drew their position from rent and access to the state rather than from production, and no industrial fraction of capital was strong enough to push an alternative. By treating industrial policy as a question of political economy, rooted in class relations, hegemony, and global constraints, the study offers a new interpretation of post-Soviet economic development, with broader implications for small peripheral economies.