Making Markets (Not) Work for the Poor: Market Ideology and Development Assistance in the Republic of Georgia

Racha province is one of the poorest provinces in the Republic of Georgia. Isolated in a high alpine valley, Racha has suffered massive decapitalization since the Soviet period and has had little access to urban markets. The "Making Markets Work for the Poor" project, funded by the Swiss Development Agency (SDA) and implemented by CARE International aimed to alleviate poverty in Racha by linking producers of pork and dairy to urban markets in Tbilisi and Kutaisi. This reflects a much larger trend in development: the neoliberal notion that by linking the poor to properly functioning markets, impoverished people can be transformed into entrepreneurs, thus eliminating the need for further aid. By tracing this project through the value chain, this research found that disregard for local historical, geographic, economic and social contexts made the neoliberal faith in markets misplaced. By ignoring the region's post-Soviet history of collapse and conflict, the local knowledge of farmers about conditions for growing and marketing food, the rich social networks of kin and friendship, and the history of similar development attempts in the region, the project ended up transferring little wealth to the poor, despite its large budget.

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Elizabeth Cullen Dunn, of the University of Colorado, was a 2008-09 Individual Advanced Research Opportunities (IARO) fellow.