The Role of AI in Improving Municipal Finance in Georgia

Abstract

This article explores the transformative potential of Artificial Intelligence (AI) in enhancing municipal finance systems in Georgia. It begins by examining the current state of Georgian municipal finance, highlighting challenges such as limited fiscal autonomy, inefficiencies in revenue collection, and issues of transparency and accountability. The paper then provides an overview of the global advancements in AI within the finance sector, illustrating how AI can revolutionize financial processes through predictive analytics, risk management, and automation. Focusing on the Georgian context, the article discusses specific applications of AI that can address prevailing challenges in municipal finance. These applications include improving revenue collection, enhancing budget allocation efficiency, and increasing financial transparency. The paper also presents international case studies from cities like Singapore and Barcelona, where AI has successfully improved municipal finance, providing practical insights and potential strategies for Georgia. The challenges of implementing AI in Georgian municipal finance, including technological infrastructure requirements, data quality concerns, and ethical and legal considerations, are critically examined. The paper concludes with policy recommendations for the successful integration of AI in Georgian municipal finance. These recommendations encompass developing a strategic framework for AI adoption, investing in technological infrastructure, enhancing data governance, and fostering public engagement and trust. By highlighting the role of AI in addressing the complexities of municipal finance, this article contributes to the discourse on leveraging technology for public administration reform and offers a roadmap for policymakers and municipal authorities in Georgia. Keywords: Artificial Intelligence; Municipal finance; Financial transparency; Ethical use of AI; Data management.