Why Armenia's Officials Are Afraid to Spend

Armenia’s government repeatedly fails to spend what it allocates, with some capital and infrastructure programs executed at tiny single-digit percentages by mid-year. In this clip, Dr. Vache Gabrielyan offers an explanation that cuts against the official narrative, drawing on a 2025 SIGMA assessment of Armenia’s public administration conducted jointly by the European Union and OECD.

The report, he notes, found a lot of ambition but low ability to execute. One root cause is not merely low capability among government employees, but their reluctance to take responsibility. Gabrielyan frames this as a byproduct of the anti-corruption campaign. When a public employee sees that almost every official has been under some form of investigation, the rational response is to slow down and avoid decisions that could later be questioned. He is careful to say this is not the only factor, pointing also to weak planning, poor execution controls, and thin project management skills.

The moment matters because it reframes a technical budget problem as a governance and culture problem. The current government, operating under the banner of Civil Contract, multiplied the compensation of state officials on the reasoning that better pay would reduce corruption and improve efficiency. Yet the country still under-executes its capital budget year after year. For audiences tracking corruption, accountability, and the day-to-day competence of the administration in Yerevan, Gabrielyan’s point is pointed: a drive to punish wrongdoing, pursued without a system that lets officials place reasonable bets, can freeze the very spending meant to build roads, schools, and infrastructure. It is a candid diagnosis from someone who has run state finance, and it reframes an abstract statistic as a human incentive problem.