Import of Institutions and Economic Value Transformation: The Interactions among the Economic Agents in Georgia

The present work discusses the decisions of economic agents and the interactions among them in Georgia‟s transformation economy from new institutional point of view. European integration is an irreversible economic orientation of Georgia, which influences both formal and informal institution formation. The authors argue that the analysis of the economic value formation aspects of the ongoing process of Europeanization is important for the understanding of the stage by stage outcomes of this process. The Association Agreement between Georgia and the EU represents Georgia‟s Europeanization action plan. The Agreement stresses that European values represent the cornerstone of economic integration and political association. The implementation of the Association Agreement will bring concrete benefits in terms of increased opportunities for small and medium sized businesses, access to the European education, strengthened rule of law, etc. The authors argue that the success of modernization depend on the one hand, institution imports and on the work of these institutions on the other. The foundation of their effective work will be those value constructs that the society holds. The success of institution implementation depends on pace of the increase in the number of people, who use them. The faster the realization of the need and benefits of the observation of certain “rules of the game”, the faster they will be institutionalized. Institutional adaptation gives the economic agents broader opportunities for their economic activities and they adopt new strategies of behavior related to the changes of the institutional framework. Adaptability to the imported institutions depends on the economic values of the economic agents and the benefits of the implementation of the new institutions. The present study incorporates economic values in the analysis of the economic agent interactions against the background of Europeanization. The authors offer a theoretical approach to pose the problem and evaluate the behavior of economic agents in the context of importing European institutions and values in Georgia. The nature of the interactions among the economic agents significantly defines the smooth functioning of the economic system. The authors emphasize that study of the economic agent behavior (state and businesses) in institution import and economic value transformation context will enable to identify the challenges of the adaptation process.