World Bank2015-07-202015-07-202015-06https://hdl.handle.net/10986/22259Georgia has an impressive growth record but social vulnerabilities persist. It remains a challenge to tackle social vulnerabilities within a sustained macroeconomic framework. This programmatic public expenditure review (PER) assesses the alignment of selected fiscal programs with the government’s social objectives. Building on the analysis and recommendations of the 2014 PER, this PER analyzes the impact of recent reforms including the social programs that were either introduced or scaled up in 2013. It gives an overview of the recent macroeconomic and fiscal developments, including the fiscal implications of the social programs in chapter one. It addresses three questions in the rest of the report: (1) has the realignment of spending toward social sectors resulted in better distributional outcomes; (2) have the agriculture support programs been targeted at productivity growth to support real incomes in poor rural regions; and (3) what is the fiscal and equity impact of the ongoing decentralization process? The first question is addressed by combining micro household survey data with administrative fiscal data to analyze the distributional impact of both taxes and government spending on poverty and inequality in Georgia in chapter two. The second question is addressed by comparing the cost of new agriculture programs with their estimated impact on agricultural productivity in chapter three. Finally, the issue of regional inequalities is partially addressed by discussing three different aspects of the current decentralization process: the expected fiscal impact of decentralization, the need to rationalize current capital grant programs to make public investment more effective, and the implications of introducing free preschool education administered at the local government level in chapter four.en-USCC BY 3.0 IGOCREDIT PROGRAMINCOME TAX EXEMPTIONMONETARY POLICYNATIONAL SAVINGEQUIPMENTACCOUNTINGCHECKSWAREHOUSEGOVERNMENT CAPACITIESDISABILITY PENSIONSINTERESTPUBLIC INVESTMENTSGOVERNMENT REVENUESOPTIONREMITTANCEDEVELOPING COUNTRIESEXPORTERSREVENUESPORTFOLIOFISCAL POLICYCAPACITY BUILDINGLOANBUDGET CONSTRAINTSGOVERNMENT SUPPORTPUBLIC REGISTRYALLOCATION OF CREDITOIL PRICESALLOCATION OF CAPITALBENEFICIARYMARKET REFORMSCURRENCYEXPORT GROWTHCOMMERCIAL BANKCAPITAL GAINSCAPITAL FORMATIONINCOME INEQUALITYMONETARY FUNDFINANCIAL INSTITUTIONSDEBTLOCAL GOVERNMENTPUBLIC FINANCELAND OWNERSHIPCREDIT PROGRAMSCAPITAL INVESTMENTSINVENTORYFISCAL DEFICITINVESTMENT DECISIONSLAND‐HOLDERSMARKET ECONOMYCOMMERCIAL BANK LENDINGHUMAN CAPITALINTEREST PAYMENTSGOODGOVERNMENT BUDGETTRANSPARENCYMARKET CONDITIONSFUTUREMOBILE PHONEFOREIGN DIRECT INVESTMENTFIXED CAPITALGOVERNMENT EXPENDITUREINVESTMENT PROJECTSISSUANCELOAN PORTFOLIOTAX RATESCOMMERCIAL LOANSINSTITUTIONAL CAPACITYSHARESINVESTMENT CHOICESPOLITICAL UNCERTAINTYPUBLIC DEBTTREASURYHOLDINGSINSURANCECAPITAL GRANTSCURRENCIESMICROFINANCEECONOMIC DEVELOPMENTFISCAL AUTONOMYTAX CODEBANK LOANLOAN OFFICERSRATES OF RETURNCOMMERCIAL BANKSFINANCIAL SUPPORTCONSUMER PRICE INDEXLENDINGTRUST FUNDMARKET REFORMPUBLIC SECTOR DEBTGOVERNMENT INVESTMENTINSTITUTIONAL CAPACITIESCAPITAL INVESTMENTPUBLIC SPENDINGREMITTANCESLAND HOLDINGSCREDIT HISTORYFISCAL DECENTRALIZATIONCREDIT MARKETINVESTINGHOUSEHOLD INCOMESLIVING STANDARDSDEFICITGOVERNMENT EXPENDITURESTAX EXEMPTIONVARIABLE COSTSFINANCIAL MANAGEMENTSTOCKFISCAL DEFICITSINFORMATION SYSTEMDOMESTIC BORROWINGLOAN PERFORMANCEGUARANTEESGOVERNMENT SPENDINGINTEREST RATEEXCHANGELOCAL GOVERNMENTSTAX COLLECTIONGOVERNMENT BUDGETINGDISABILITY PENSIONTAXINCOME TAXREFERENDUMBUDGETINGBENEFICIARIESINFLATIONPENSIONDEVELOPING COUNTRYBANK LENDINGBUDGETMATURITYMACROECONOMIC STABILITYFISCAL POLICIESAGRICULTURAL LOANACCESS TO FINANCINGPERSONAL INCOMETRADINGCORPORATE INVESTMENTSTAX EXEMPTIONSINTEREST RATESOPTIONSHOUSEHOLD INCOMEPRIVATE INVESTMENTDEFICITSRETURNLENDERSDIRECT INVESTMENTLOANSTAX COLLECTIONSINVENTORIESRESERVESGROSS DOMESTIC PRODUCTCASH TRANSFERSFINANCEPUBLIC INVESTMENTTAXESEXPENDITUREINFRASTRUCTURE INVESTMENTEQUITYINCOME TAXESFOREIGN EXCHANGE RESERVESTAX RATEAGRICULTURAL LOANSCAPITAL GRANTFINANCIAL CRISISPENSIONSCAPITAL GRANT ALLOCATIONSBUDGETSINTEREST RATE CAPSWORKING CAPITALCONTRACTGOVERNMENT REVENUEREPAYMENTEXPENDITURESPROPERTYPROPERTIESMARKETFOREIGN EXCHANGELEVYLAND TITLEMARKET RISKSINFRASTRUCTURE INVESTMENTSGRANT ALLOCATIONSINTERESTSGOODSFIXED ASSETSBANK LOANSSECURITYTRANSFER PAYMENTSINVESTMENTNATIONAL BANKSHARETAX SYSTEMCOLLATERALINTEREST COSTSPOVERTYTANGIBLE ASSETSDECENTRALIZATIONREVENUEEXTERNAL DEBTPROFITINVESTMENTSCHECKINTEREST RATE RISKEXCHANGE RATEINSTRUMENTREPAYMENT RISKGUARANTEEReportWorld Bank10.1596/22259