Crime and Punishment. The Georgian Version

Crime and Punishment. The Georgian Version

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Zero-tolerance and brutal punishment of crime, corruption, tax evasion, as well as non-payment of fines and utilities fees, may have been justified as part of a radical reform effort in 2004-6 that sought to restore trust in Georgia’s state institutions. The challenge for the Georgian policymakers is to realize that excessive brutality is no longer necessary in a situation in which people no longer know how to take or give bribes, and are used to paying their bills and fines on time.

*     *     *

Driving back home after a two-week family vacation in Turkey, a horrific surprise awaited us at the border-crossing in Vale (near Akhaltsikhe). We arrived just before midnight on Saturday, August 26, 2017. What we knew to be a very efficient procedure lasted much longer than the expected 2-3 minutes. And then came the shocking verdict:

– Dear Mr. Livny, you will not be able to continue your journey. According to our records, there is an order to have your car impounded. We are not yet sure why, but perhaps you haven’t paid a fine.

The officer in charge of our case spends the next hour on the phone and then confirms: we forgot to pay a 10 GEL fine issued by the patrol police for a parking violation committed at the end of May.

– Mr. Livny, since you have failed to pay on time – and the payment is now more than two months overdue – I have no choice but to take your car away. I can see you have two kids in the back of your car, and I understand it may be a little unpleasant, but I have to follow my instructions.

A little unpleasant? Hmm. Try to imagine: well after midnight; the whole family exhausted after 1,200km on the road; two kids hardly dressed for the 12 degrees outside; truly in the middle of nowhere, 300km away from home and no hotels nearby, no other cars on the road, and no taxi service available to take us to safety.

– I am very sorry, Batono Eric, – suddenly adds the police officer – there is another small problem. Because you did not pay the fine, it appears that your driving license had been revoked on July 29. If that’s the case, I have to fine you another 500 GEL for driving without a valid license.

Another hour goes by in order for the police to issue the 500 GEL fine and for the car towing service to arrive to the scene of the crime. Shortly before dawn, close to 4am, we did manage to get to civilization (if Akhaltsikhe counts as such), given a ride by the kind towing service guys. We did not freeze to death, and were not eaten by the wolves. Welcome to Georgia, at its best.

*     *     *

A little crime and punishment calculus is in order.

Crime:

• Non-payment of a 10 GEL fine for a parking violation committed on May 29, 2017.

Punishment:

• Me, my wife and our two children subjected to immense stress.

• Car impounded early on Sunday morning, August 27. The earliest it can be retrieved is August 29 (at the cost of 160 GEL). The 10 GEL fine can be paid online any time but police offices are closed on Sunday and Monday (due to a national holiday).

• Cost of hotel in Akhaltsikhe (200 GEL).

• Time and cost of transfers to Tbilisi for family and luggage, and back (300 GEL).

• Time and cost of having my driving license immediately restored: 40 GEL paid to the Ministry of Justice, 60 GEL paid to the police; 4 hours spent in lines at the police (x2) and the Justice House. For some reason, the single window approach does not work for people who need it the most, people whose car has been impounded!

• Fine of 500 GEL for driving without a license (actually, for driving without knowing that the license has been revoked).

*     *     *

A sarcastic comment by a friend on my wife’s Facebook post: “if late to pay a 20 lari fine, one should be executed by a firing squad and burned together with his vehicle.”


TAKING BRUTALITY OUT OF THE SYSTEM, STEP-BY-STEP

Obviously, we have been extremely unlucky. The above crime and punishment calculus could have been much more humane had we been stopped in Tbilisi, with no kids and luggage in the car, in the middle of the week and during the government’s office hours. But, should bad luck be reason enough to torture innocent (though, perhaps, forgetful) citizens or God-sent guests? Would it not be better to rewrite Georgian laws and regulations so as to bring legal sanctions in proportion with the administrative sins and offences committed?

The theme of Georgia’s brutal laws and regulations is hardly a new one.

Brutality in the administration of criminal justice was one of the main reasons for the political defeat of Saakashvili administration and subsequent contempt for his National Movement. Taking brutality out of the criminal justice system has been one of the top priorities – and a key achievement – of the incoming Georgian Dream government.

Moreover, pressure by Georgian businesses and international business associations has led to significant improvements in the system of Georgian tax administration. For example, business bank accounts can no longer be frozen for an indefinite term upon the slightest suspicion of tax evasion.

Yet, as I have written on these pages in the past, there is much less public awareness of the brutality embedded in Georgian administrative practices when it comes to households and individuals. And, since ministerial chairs are not impounded, and governing licenses are not invoked for a lack of timely action, there appears to be no political will for taking the necessary action. At least for now.


A TIME TO WEEP AND A TIME TO LAUGH (ECCLESIASTES, 3:4)

Zero-tolerance and excessive punishment of crime, corruption, tax evasion, as well as non-payment of fines and utilities fees, may have been justified as part of a radical reform effort in 2004-6 that sought to restore trust in Georgia’s state institutions (and, actually, build them almost from scratch). Indeed, after more than a decade of utter lawlessness, Georgian citizens and bureaucrats had to be scared into law-abiding behavior. Hence, no presumption of innocence in dealing with crime, corruption and … non-payment of fines or utility fees.

You happen to be suspect of crime or corruption? Buckle up for a wild ride: a lengthy pre-trial detention in a terribly overcrowded prison cell, torture and intimidation until you confess and agree to an expensive plea bargaining deal. In case you refuse (why would you?), pliant courts will sentence you to many more years of torture in Georgian jails. Benefits: every criminal gets punished. Costs: many innocent people get punished, too.

You are two days late to pay your electricity bill? Your electricity supply will be cut off, regardless of circumstances (small children or somebody sick in the household). Benefits: everybody pay their bills in full and on time. Costs: those who are late to pay (e.g. newcomers) get disproportionately punished.

A complementary reform was undertaken to simplify public administration rules in order to reduce and in many cases completely eliminate bureaucratic discretion and related corruption risks.

The government is tendering the construction of a bridge? The contract goes to the lowest bidder in an anonymous electronic tender procedure, without reviewing the applicants’ prior experience. Benefits: price offers can be reviewed by a robot, hence no corruption risks; the governments saves on expenses. Costs: contracts are sometimes awarded to companies that lack necessary qualification, hence construction risks (if a project get completed) and waste of public resources (if it doesn’t).

Your business is audited by the Georgian tax authorities? For fear of mistakes (that would not be tolerated), tax inspectors take months to complete an audit; any findings result in the maximum allowable penalties and a freezing of the business’ bank accounts. Benefits: businesses pay their taxes on time and in full. Costs: businesses are paralyzed, resulting in losses of private and public income and morale.

Such brutality has been very effective in changing people’s expectations and moving the system to a new ‘equilibrium’ in which everybody think twice before engaging in illegal behavior: bureaucrats no longer extract bribes; citizens no longer offer bribes; businesses and households pay their taxes, fines and electricity bills without the slightest delay.

The challenge for the policymaker is to realize that brutality is no longer necessary to maintain the new equilibrium in which people are already used to paying their bills and fines on time. Georgia’s prosecutors can no longer extract confessions, and their cases are now held to a stricter standard by independent courts. Did this cause a spike in violent crimes or crimes against property or drugs? Obviously, not. Even though Georgia no longer rapes its prisoners, it remains one of the safest countries in the world. Similarly, the requirement to receive a court order for a lengthy freezing of a business bank account did not lead to a spike in tax evasion.

*     *     *

Different countries use different means of making sure fines and fees are paid on time and in full. In Israel, a country I come from, late payment of a fine results in fairly steep financial penalties. And there is no avoiding: you will have to pay the moment you approach the government for any service such as car registration, or extension of a license. The Israeli government is probably very happy to wait for late payments while charging above-market interest and penalties on any overdue amounts. Proud of its e-governance and IT capabilities, the Georgian government could complement the Israeli solution with text messaging to remind people of due payments. That would be good business and actually nice.


Eric Livny is President at the International School of Economics at Tbilisi State University (ISET), and ISET Policy Institute, www.iset.ge, www.iset-pi.ge


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