EDUCATION POLICY AND KNOWLEDGE BASED ECONOMY: CASE OF

Georgia is gradually shifting to a Knowledge Based Economy (KBE). The following study examines the relationship between the government’s expenditure on education and enrollment rates in Georgia, which focuses on the ongoing education reforms in the country. The research aims to assess the extent view to which increased public investment in education has influenced enrollment rates across the three levels of education (primary, secondary, and tertiary levels). Due to a lack of historical and inaccurate statistics from 1990 to 2006, a longitudinal analysis is conducted data from 2006 to the present day, with particular attention to two distinct periods: 2006–2016 and 2016–present, it is also important to note that Georgia has joined Bologna Process in 2005 and establish EHEA (European Higher Education Area). Methodologically, regression analysis is used to quantify the impact of educational spending on enrollment rates, while controlling for other socio-economic variables. The findings reveal a positive, albeit delayed; correlation between education expenditure and enrollment rates increased, with the most significant improvements observed in the post-2016 period, coinciding with intensified reform efforts and the government’s prioritization of education. However, the study acknowledges that it may not fully capture the true dependency of enrollment rates on spending, as other influential factors, such as demographic shifts and economic conditions, are not included. Despite these limitations, the analysis provides a partial yet substantive explanation of the core relationship between government spending and enrollment rates.