Executive Summary

The Atlantic Council’s 2026 Freedom and Prosperity Indexes reveal a widening mismatch in Georgia’s development. In 2025, the country scored 66.6 in freedom, ranking 73rd among 171 states, while its prosperity score reached 78.2, placing it 43rd. Georgia therefore stands 30 positions higher in prosperity than in freedom. The gap is not evidence that prosperity is independent of institutions; rather, it suggests that current social and economic outcomes still benefit from reforms, human capital, infrastructure, and international integration accumulated over previous decades.

The central concern is the direction of change. Georgia’s freedom score rose for much of the period from 1995 to 2018 and peaked at 76. By 2025, it had fallen by 9.4 points, or roughly 12.4 percent. The decline is concentrated in the rule of law, judicial independence and effectiveness, property rights, legislative constraints on the executive, and the predictability of laws. Prosperity has continued to improve, but its indicators—income, education, health, infrastructure, and life expectancy—typically respond to institutional deterioration with a delay.

Main Findings

• Freedom has reversed course. Georgia moved from a long period of improvement to sustained regression after its 2018 peak.

• The rule of law is the weakest link. Legal clarity scored 43.6, judicial independence and effectiveness 53.0, and property rights 54.1.

• Prosperity remains comparatively strong. The 78.2 score reflects accumulated improvements in income, health, education, and social infrastructure.

• Georgia has lost regional leadership. Moldova and Armenia now rank above Georgia in freedom, although Georgia still scores higher in prosperity.

• The current divergence is unlikely to be sustainable. If legal and political institutions continue to weaken, investment, private initiative, public services, and eventually prosperity are likely to suffer.

What the Indexes Measure

The Freedom Index combines political, legal, and economic freedom. It assesses elections and civil liberties; legislative constraints on executive power; judicial quality, legal predictability, corruption, bureaucracy, and security; as well as property rights, trade, investment, and women’s economic freedom. The Prosperity Index measures income, health, education, environmental quality, income equality, and opportunities available to minorities. Both indexes use a 0–100 scale, with higher scores indicating stronger performance.

From Reform Momentum to Institutional Regression

Georgia’s freedom trajectory can be divided into three phases. From 1995 to 2003, institutions improved slowly from a low starting point. Between 2003 and 2018, rapid administrative and economic reforms, greater openness to trade and investment, and the formal preservation of political competition produced substantial gains. Georgia became widely regarded as one of the post-Soviet region’s leading reformers.

Yet the rise in the overall score concealed an important imbalance. Administrative modernization and economic liberalization advanced more quickly than judicial independence, legal predictability, and institutional accountability. The reform model created a more functional and open state, but it did not fully entrench the legal and political safeguards needed to protect rights and constrain executive power over the long term.

The turning point came in 2018, when Georgia reached its historical freedom peak of 76. By 2025, the score had declined to 66.6. This pattern is better described as rapid initial transformation followed by incomplete institutionalization and subsequent regression than as continuous democratic consolidation.

The Internal Structure of the Decline

The weakest components are concentrated in the legal sub-index. Legal clarity and predictability received Georgia’s lowest score, 43.6. Unclear, frequently changing, or selectively applied rules make long-term planning more difficult for citizens and businesses and increase the risk of arbitrary administration. Judicial independence and effectiveness scored 53.0, indicating weaknesses in the courts’ ability to protect rights, enforce contracts, resolve disputes impartially, and check executive power.

Property rights scored 54.1. This matters because formal market openness cannot by itself produce secure investment when ownership protections and legal remedies are uncertain. Legislative constraints on the executive scored 57.7, while bureaucracy and corruption scored 57.9. Taken together, these indicators point to a broader institutional problem: weakening checks and balances, uneven enforcement of rules, and limited confidence that public authority is exercised within stable legal boundaries.

Why Prosperity Can Still Rise

Georgia’s prosperity score of 78.2 reflects improvements accumulated over many years: rising household income, broader access to education, better health outcomes and life expectancy, and expanded social infrastructure. This can be understood as the inertia of accumulated prosperity. Today’s outcomes partly reflect earlier reforms, developed human capital, and integration into global markets. However, institutional decline often first appears in investor expectations, judicial trust, administrative behavior, and the quality of decision-making. Its economic and social costs emerge later through weaker investment, reduced competition, lower productivity, declining public-service quality, and the concentration of economic opportunity.

The Atlantic Council’s broader framework emphasizes that the rule of law is both a precondition for prosperity and a catalyst that enables economic freedom to generate durable, widely shared gains. Georgia’s experience supports this conclusion: liberalized trade and simplified regulation can provide a strong initial impulse, but they cannot substitute for independent judiciary, predictable rules, secure property rights, and accountable government.

Georgia in Regional Perspective

Georgia occupies an intermediate but deteriorating position in the post-Soviet region: it remains substantially freer than the most authoritarian states, but is increasingly distant from the Baltic countries and has lost its former advantage over other transitional democracies.

The Baltic states show a consolidated model in which freedom, the rule of law, and prosperity reinforce one another. Georgia trails them by 17.7–23.7 points in freedom, but by only 5.8–7.7 points in prosperity. Its social and economic outcomes are therefore much closer to the Baltic level than the quality of its political and legal institutions.

Moldova (69.0) and Armenia (67.9) now stand above Georgia (66.6) in freedom. The gaps are modest, but the direction is significant: Georgia is losing ground even to transitional democracies facing instability and external pressure. It still leads Moldova by 1.0 point and Armenia by 3.0 points in prosperity.

Georgia still retains freedom advantage over Azerbaijan, Russia, Belarus, and much of Central Asia, while prosperity scores are far closer: Belarus is 0.1 point above Georgia, Kazakhstan only 0.8 below, and Russia scores 74.3. Natural resources, inherited infrastructure, human capital, or centralized redistribution can temporarily sustain prosperity, but do not guarantee that it will remain inclusive or durable.

Implications and Possible Trajectories

Three trajectories emerge. Institutional recovery—greater legal clarity, independent courts, effective property protection, and real legislative oversight—could reconnect growth with sustainable prosperity. Prolonged asymmetry may allow prosperity to rise temporarily while freedom stagnates, but would slow convergence with advanced European states. Deeper erosion would eventually damage investment, entrepreneurship, public services, and prosperity itself.

Georgia’s challenge is not simply to preserve growth, but to rebuild the institutions that make it durable, inclusive, and resistant to political capture. The indexes do not establish a single causal explanation for every national development, but they identify a clear long-term risk: accumulated prosperity cannot indefinitely compensate for declining rule of law, weakened courts, insecure property rights, and diminished government accountability.