Science

Statement of state involving in the economy

LAMARA QOQIAURI
Completeness of a market – this is the basis for state interference, main goal of which is growth of effective functioning of the economy in the way of reducing insufficiency of a market.
A mechanism of a market doesn’t work in a number of cases. They are:
· When a market can not set a value – a problem of social wealth;
· When a market can not set such price, which will balance estimation of a commodity by the consumer in relation with the value, related with resources wasted on production of this commodity (a problem of external effects);
· When a market represents its incompleteness in practice, which gives rise to the ineffective distribution of the resources in such situation when:
a) market participants have no needed information for making effective decisions (a problem of asymmetric information);
b) existence of market structures of monopoly or incomplete competition gives rise to the fact, that separate participants may influence upon market prices according to their interests, and sometimes control separate markets (a problem of incomplete competition);
c) situations, when growth of the scales of production gives rise to the reduction of the production price according to the technological specifics. This makes the existence of more then one producer at the market important (a problem of natural monopoly).
In this article we discuss specific variety of the monopoly market – natural monopoly, which exists at the expense of scale economy. I.e. when only one firm serves for the market, expenses at the production unit are less, then those with two or more firs, this is economically more effective.
Sometimes we can avoid negative effect by setting property rights. According to Crusoe’s theory, if the size of setting property right is close to zero, its setting will make it possible to avoid external negative effect.
Social wealth – this is he one, transfer of which to another single person is impossible without its distributing to one more person at the same time.
The wealth, which is exclusive and not competitionable – is net social wealth.
Exclusive and competitionable wealth, in its turn is net private wealth (clothes, food). Not exclusive and competitionable wealth (fish in the ocean) and also exclusive and not competitionable wealth (cable television) are called net local wealth.

Summery
Corporative Management of Investment Process
Abesalom Gabrichidze, Xatuna Barbakadze
In the Global economic space, the evolution of corporative investment policy is accompanied by the principle changes of firm’s investment policy. In the managing of capital investment, harmonized relationship of all participants of corporative investment affair starts playing the main role.
Corporative management of investment process and getting some kind of decisions in this field are mainly stipulated with aims, which are planned by the company. Except project’s profit, in the goal hierarchy it is very important such as growing of firm also preserving good relationship with customer, accessing high labour productivity, working out new kinds of production, raising staff’s qualification and so on.
Solving the problems – which are connected to the mobilization and distribution of means of investment, thier control of using, achieving successful results in their all stages of investment process – is possible only during the corporative managmennt of correctly constructed system, which means rational sharing of rights and obligations among the participants of company business. The basic elements of such system contains the following: trancparence of firm’s regulation and structure of property, participation of shareholders in the managment, effective protection of monotonous shareholder’s rights, guaranteeing the shareholders with high-level and authentic business information.
In the modern company competition the most important factor is the posibilities of perspective parameter’s combination in the firm managment with the most suitable model of corporative managment regulation in the investment process.

Summery
Unbiased and Ethical Decisions in Managerial Work
Evgeni Baratashvili, The Head of Business and Economics Management Social-Humanitarian Faculty Department, Doctor of Economic Studies
Tinatin Asatiani, Social Psychologist, trainer-consultant, Tbilisi Free University (ESM-Tbilisi)
The article shows the difficulties and some specifics of managerial decision making process.
In particular, it is about objectivity and fair ethical decisions the managers will make for their and their organization’s best interests.
Scientific knowledge and real life experience prove that a lot of factors influence seemingly objective thinking and behavior of people. Social perception, stereotypes, prejudices (conscious or unconscious, implicit) are the social psychological dimensions of decision making process that shape the bias and create the so-called “illusion of objectivity”.
The article explores also several related sources of unintentional, unethical decision making: bias in favour of one’s own group, conflict of interest and tendency of overclaim credit.
The authors underline that the article will help the reader to get a helpful information, be aware of difficulties, try to control them and find ways and strategies to reduce the negative impact they may have. It will help to avoid “bed” unethical decisions and be more successful for their and their organizations’ sake.

Resume
Existing Situation in Tourism and Strategic Directions of its Development in Georgia
Marina Metreveli
In the functioning of tourism sphere, analysis of economic, juridical and organizational factors, originality of development and estimation of tendencies has the great importance for the development of national economy.
Today the tourism is acknowledged as a priority sector of national economic development by the numerous world countries and also by the Georgian government, which has to fulfill the most important tasks for the country’s social-economic advance.
Practice has shown that, where the tourism was developed without planning and controlling, destinations (destination items) discovered not only in front of the ecological and social problems, but also after a while it was difficult for them to attract the tourists.
It can be said, that today in Georgia tourism is developing without suitable legislative basis and national conception of development. In the following years, with the realization of our country’s transit function, the demand on our touring country’s role will increase not only in the region of the South Caucasus but also in all over the world. According to the perspective of the country’s strategic development Georgia should become as a developed tourism country.
Policy of tourism development should be in accordance with the policy of country’s development, herewith, national and regional tasks should dominate in comparison with local and sector interesets.
According to the above mentioned, it is neccessary to work out the state program for tourism development, which will base on planning innovative methods of this field, on the developed infrastructure and professional stuff grown up on International standards. Only with the attitude of political system will be possible to make absolute realization of our country’s economic interests, because the biggest problem existing on the modern stage of development, unemployment and poverty, will be overcome in all ageing group of the population.

Resume
Globalization and National State: Theoretical Aspects
Emir Eteria
Any discussion about the main point of Globalization and its fundamental determinants is finally connected to the mentioned universal process’s issue influencing nation states function.
Globalization is critically estimated especially by the majority of scientists of the developed and transitional economic countries. They prefer independent development of national economy with the state participation and discuss the globalization process as a braking factor of national economic development. Herewith, the scientists of mentioned countries pay attention to the national traditions, values, cultural originality and negative influence of globalization, so they make an accent to the possible negative political-cultural results of globalization.
In the condition of intensification of globalization process connected to the role of state, two radical different opinions dominate: 1.Gobalization reduces the role of national state in the process of regulating economic activities. 2. Globalization process increases the role of national state.
Economic globalization, the next development of global economy, depends on the economic policy of the developed countries, which is directed to guarantee the security of economic development.
Formation of global economy and its next development means the existance of regulator organizational structures, whose working policy determines the character of global economic functioning and represents the world economy, as a structural unit of organic entirety.
Institutional structures of the world economy has a different history, directions of activity and different lever to influence over economy, which stipulates their different weight in the process of global economic development.
On the modern stage, current process in the world economy may be discussed as a stroggle between self-regulation possibilities of the world economy.
In the world economy, the role of TNKs is exaggerated in many cases, when the state, as an Intitute represents the formed institute of economic activities’ regulator framework. Also it is important to foresee so called “market fall”, which is indisputable on such as separate national aslo regional and global economic level.
National state represents the Institute, which makes the rules of economic activities and regulations on the International level
In the globalizing economy State-Centric approach represents the dominant conception. It is an obvious process that the state buys new functions and doesn’t lose them, which is often considered in the economic globalization process.
According to the fact that the International Organizations does not have characteristic attributes for the national state and can’t fulfill all functions perfectly, the institutional base of the next global economic development is the national economy and the national state.

Resume
Economic Effectiveness of Foreign Business in Georgia
Davit Sixarulidze
The problem of estimation of foreign capital’s influence causes a great interest for Georgia. It is very interesting to discuss what is happening in Georgia, how suitable it is to the International tendency, what is the foreign business’s potential and factual role in country’s economy.
Accroding to the labour productivity foreign enterprises are nearly four times more effective than native one, which is caused by their technological leadership and possessing advanced technologies. Receiving countries, which managed to attract TNK, are experiencing the influence of new technologies, which’s roles are invaluable in the development of their industrial basis.
During the last years, according to the economic effectivness may be said that the development of foreign business in Georgia is following the existing tendencies in the world. The labour productivity of the foreign enterprises was 1,5 times more in comparison with local enterprises. In 2006 share of employed people was 26%, in 2007 this index grew to 36%. But there is no statistic datas about the export potencial of foreign enterprises, so it’s impossible to make any concrete analysis. But if we analyze the branch structure of investment we will see that foreign capital investment basically are accomplished in the network industry, in immovable property, in heavy industry or in production of raw materials. It’s true that accomplished capital investment in immovable property and network industrial makes a positive influence on the country’s infrastructure, but according to favourable production and export it is less effective.
So, in a medium-term of period, capital investment becomes inevitable in such enterprises which will help to increase export. This means to work out an effective policy oriented to the export.

Resume
Globalization and International Labour Market
Evgeni Baratashvili, Nino Paresashvili
It is noted in the article, that in the scientific and business circles we find diametrically different estimation about globalization as an universal phenomenon from the beginning of its existance. One group of scientists and experts points to its positive results, the second one – to the negative. According to the Western explorers, definition of ideological-political results of globalization must be discussed in the following aspect: human rights has the fundamental importance, democracy is stronger than tyranny, market is more effective than team economy, openess is better than self-isolation. In the Russian science it is spread such kind of understanding of globalization phenomenon, which’s basic task is to ceate the kindred unity of mankind by the strong influence of integrated processes, which has a place in the different sphere of society. In this approach spectrum of positions are meant, which indicates to the different character of process.
According to the results of foreign and national investigation analysis the basic characteristics of “New Social Regime” is isolated and estimated. Informative revolution can radically transform social existance, open boundaries for contacts in all over the world, change the content of different kinds of activities and turn individuals into the world citizens.
Economic Globalization process is expressed in strengthening inter-dependence of different countries’ economics. It makes difficult and limits possibilities of the State influence on the macro-economic processes of the national economy. First of all it touches the state regulation in employment. Globalization process makes it more divulging the differentiation in the productivity of labour, payment and work condition among countries, which on the one hand increases desire of working migration and on the other hand it limits this process. All of these justly cause inevitability to lead labour protectionist policy.

Resume
The Role of Public Sector and Social Order in the European Economic Order
Badri Giorgadze
The economic order means the totality of rules, which creates common acting norms and regulatory of separate physical and juridical person. According to it, the question of Economic Order Policy is to create framework conditions for private economic and State activity and suit them to Social-Economic and Technological processes.
Public Sector and Social Order maintenance plays the main role in the formation of European Economic Order.
Public sector is the central element of “European Model” of economic and social policy. On the whole, here the matter is about sharing state mission in such a way to be positive in growth of demand and distribution.
Public Sector has the only function to strengthen Juridical and Instutional basis of market economy.
Public Sector creates important instruments, in order to achieve those goals, which cannot be fulfilled by the markets – these are Social Justice, Total Employment, Regional Equality.
Social Order means the totality of institutions and norms, individuals and groups in order to regulate social situation.

Resume
Formation of Regional Strategies of Inovative Environment
Revaz Sandroshvili
According to the article of Revaz Sandroshvili – “Formation of Regional Strategies of Innovative Environment” – development of innovation is the strategic necessity of State Policy. Innovative activities is explained as a creation of a new or improved production and new or refined technological process, which is realized in the sphere of scientific research and scientific-technical achievement.
There are different ways of supporting the state-regional innovations: receiving tax privilegies, creating suitable infrastucture, financing innovative strategies by the competition way and so on. It is noted that the existence of innovative strategy represents the vital inevitability for the region’s stable development. Characteristics of Strategic goal is aslo discussed. On the basis of systemic approach, with the help of innovation compiler, strategic model of development is constructed. The inovative strategy of region depends on the changes of environment. The region itself can form these changes. Maybe changes already exist in environment. Strategy gives us means of ascertainment how we can use existing potential with foreseeing already existed and possible danger and opportunity in order to achieve the goals. Strategy gives us only the general direction and that’s why it must be fulfilled by the measures of tactical character. Finally, the goal of working out the strategy is to form the hard potential of region’s sucessful development in front of the competition foreseeing its advantages.

Resume
The Role of Clusters in Regions’ Innovative Development
Revaz Sandroshvili, Koba Sandroshvili
In the article of Revaz Sandroshvili – “The Role of Clusters in Regions’ Innovative Development” – innovative clusters are explained. The Innovative active cluster means the totality of basic novelties on the distinct period of time and in the distinct economic space. Innovative clusters can become such kind of basis on which innovative system of region is formed. Innovative clusters help to transfer “innovations” from one subject to another in business relationship.
Innovative environment has interseasonal importance and appears like a guarantee and source of moving forward: it is a means and result. According to such kind of environmental understanding, we can talk about innovative advance as a specific result of post-industrial development. We mean not concrete improvement but transformative “Shelf”. This is possible by the protection of private and commercial clandestine rights, that limits reaching the innovative production in installed period, so it gives the special ability to the economic subjects to use new technological and organizational decision. The right to take out such kind of profit appears as compensation for those resources which were spent on mastering and working out the innovative decisión. This profit is neccessary for the following innovative activities of business, region and country’s community.
So, innovative cluster plays an essential role in the development of region’s economy. That’s why there is a task before the state to form profitable innovative environment for the development of innovative clusters and create conditions for their interaction.

Resume
International Strategic lliances: Adventages and Functional Problems
T. Turmanidze, Academic Doctor of Economy,
L. Bulia, Doctor of GTU
Strategic Alliances, where two or more companies accomplish profitable co-operation, are becoming more and more popular form in the International business. Alliance gives some adventages to the companies participating in it. First of all, it simplifies for the companies to penetrate through new markets. The second, it gives the chance to the adoptive companies to share risks with the partners of Alliance. The third, it makes easier to get knowladge and experience from one partner to another. Lists of factors are realized in the article, which makes an influence on the formation of strategic Alliance. Different kinds of strategic Alliances are discussed in order to contain different spheres of activities by the Alliance’s partner companies.
Possible problems are discussed in the article, which can derange their successful co-operation in the Alliance. These problems are: incompatibility of co-operation, limited availability of information, conflicts in the sphere of income sharing, losing the independence and changing the conditions of making business.

Resume
Diversity and Ethic of Competition Nature
Tamar Gambashidze, Naira Gvedashvili
It can be said that fundamental and famous economic category like a competition does not exist. The term ”competition” is often used with different meanings by economists.
Competition represents the business element. In the conditions of competition business always directs to reduce expanses on manufacture and improve quality of production. In the modern conditions, competitors became more aggressive and competitive battles fight strongly to be not only regional and world leader but also to share the markets among the firms in competitor countries. Nowadays, in the competitor battle the process of power sharing comes not to Europe and the USA, but to the Pacific Ocean countries. Today basically 14 countries participate in the competition – the USA, Canada, Australia, New Zeland and 10 countries of the Pacific Ocean.
Pure Competition arises, when large amount of buyers and sellers are employed producing homogeneous production.
During the perfect competition two characteristics are added: perfect (absolute) mobilization of resources inside the market and existence of barrier for them entering and coming out of the market.
Effective (Real) competition arises, when buyers and sellers operate independently, even if though market is not pure and perfect competitive.

Resume
The Role of Equalized Transfer on the Modern Stage
Giga Gvelesiani
In spite of the fact, that local authority with the help of tax source manages the mobilization of quantitative resources, in nearly all country, on the modern stage, importance of resources – received by transfer – is quite high. We can freely say that according to many countries, existing resources would be quite limited without transfers in the hand of local authority.
For guaranteeing the equalized existing situation among regions, countries – with the help of transfer system – use different formulas in realized calculation. According to the countries, already experienced approaches is often quite different and some of them base on quite a lot componental formulas, though it must be noted that similar approach will not always guarantee an effective result.The desicion was adopted in Georgia. According to it, during the calculation of equalized transfer, already used formulas has improved with the help of new approaches.
With its importance, changing the formula of equalized transfer is the main issue. The formula, which has been chosen in Georgia among self-governing units in order to equalize the existing differences, has the lists of adventages in comparison with its predecessor, however used approaches has its own defects too. In the article is discussed such as positive also negative sides of equalized transfer’s new formula.