Regional Inequality in Georgia in the Context of Cumulative Causation Theory

Abstract

The aim of the paper is to analyze regional inequality in Georgia through the prism of cumulative causation theory. The study is based on Gunnar Myrdal’s concept, which argues that economic development is not a self-regulating process, but is characterized by self-reinforcing mechanisms that, over time, amplify initial regional inequality. This theoretical framework integrates the principles of new economic geography, enabling a combined analysis of spatial concentration, agglomeration effects, and market access. The study is based on the socio-economic characteristics of Georgian regions in 2024, including: indicators of gross regional product (GRP) per capita, employment level, business activity, and infrastructure accessibility. In the paper, the structure of regional development is assessed, and the main patterns of spatial inequality are identified using these indicators. The analysis reveals that Georgia's economic space is sharply monocentric, with the capital city functioning as the core of the dominant agglomeration, while regions are integrated into this core to varying degrees. The results of the study indicate that the concentration of economic activity in the capital city generates positive feedback mechanisms that strengthen capital, labour, and innovation. This process is consistent with the logic of cumulative causation, in which initial advantages are transformed into permanent economic dominance. At the same time, peripheral regions experience the so-called “reversal effect”, which is manifested in population migration and a decrease in economic activity. The relative weakness of the “spillover effect” indicates that the benefits of economic growth are not evenly distributed across space. The study also shows that the relationship between market access and development is non-linear. Regions with intermediate levels of access often find themselves structurally disadvantaged, unable to benefit from agglomeration effects and at the same time lacking independent growth dynamics. In this context, small, demographically constrained regions may exhibit a relatively stable yet low-dynamic development trend. The study results confirm that regional inequality in Georgia is a strong cumulative process, driven by spatial factors, asymmetric market access and agglomeration mechanisms. These findings have important policy implications, indicating that regional development strategies should focus not only on resource allocation but also on reducing structural spatial imbalances by developing infrastructure, improving market access and promoting polycentric development.