Georgia on my mind


I've blogged before on the question of where, assuming that Britain is indeed going to the dogs, libertarians could move to. I suggested Hong Kong, Switzerland, Australia, and the United States, all of which had their various pros and cons. One possibility I hadn't previously considered, however, is Georgia – the former Soviet republic which might just have the most libertarian government in the world.

Let's start with the tax system. Their flat-rate income tax – initially set at 25% – was cut to 20% in response to the economic downturn, and is set to be further reduced to 15% by 2013. The tax on interest and dividends will be phased out by 2012. VAT is 18%. Corporation tax is 15%. Their welfare system is equally sensible. Rather than funding universal public services directly, the government provides highly targeted (i.e. means-tested) assistance through vouchers and cash benefits, leaving choice of providers entirely to the recipients.

What's more, it looks as though the government will soon pass into law one of the best pieces of legislation I've ever seen: The Liberty Act. This act, which is going to be incorporated into the Georgian Constitution, caps government expenditure at 30% of GDP, budget deficits at 3% of GDP, and public debt at 60% of GDP. The establishment of new regulatory agencies is banned, as are price and capital controls. It also enshrines the principle of choice in social programmes, requires that impact assessments are carried out before any new legislation is passed, and, best of all, mandates that any new taxes or tax rises must be approved in a nationwide referendum.

Of course, Georgia is not perfect. It's still a fairly poor country, with persistently high urban unemployment, and 55% of the workforce employed in agriculture. Inflation is relatively high, and corruption remains a problem. And then there is Russia. But if those drawbacks don't deter you, then Georgia has one additional advantage. Its open borders policy means that if you want to move there, you are free to do so.