This book analyzes the processes of modern tax system formation in post-Soviet Georgia. In explaining tax policy it challenges theoretical perspectives focusing exclusively on domestic actors and structures or exclusively on external pressure. Georgia and the other countries in the post-Soviet bloc inherited similar institutional structures from the Soviet regime and were under comparable external pressure to reform their economic policies. Nevertheless, Georgia initiated and managed to implement radical reforms of its tax system. In order to account for the radical reforms of Georgian tax policy in the period 1991-2005, the book develops a theoretical framework termed 'transnationalization of a public policy arena'. The core claim is that new ideas diffused from external actors can become internalized by domestic policy actors. These actors become carriers of ideas and push for new policies through domestic institutions leading to policy change. The competing theoretical claims are tested on the case of Georgia via a process tracing method. The empirical analysis also investigates whether new policy principles were implemented and whether this led to increasing tax intake and ultimately the establishment of a Georgian tax state.

Udgivet april 2011

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