The Economics of Social Protection

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The paper therefore looks back to the pre-neoliberal era, to the post-War and post Independence era when the world experienced unprecedented two to three decades of very high rates of social progress through state interventions on economic and social policy. These successes have been downplayed by proponents of neoliberalism, who continue to advocate against these models. Even as global demography has shifted in favour of young people, governments have fallen short on their commitments to young people. Looking towards the future, the major tension is how they balance their policies between approaches that privilege delivering on their human rights commitments or those that give priority to the demands of mainly multinational capital.

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View the discussion thread. Social protection and growth: Research synthesis. Research reports and studies July Nicholas Mathers and Rachel Slater. This review paper examines the evidence of the impacts of social protection on growth at macro national , meso community or local regional and micro individual or household level and through direct and indirect channels. Key messages Evidence is overwhelming of the positive impacts of social protection on household productivity and labour market participation in developing countries.

Substantial evidence shows that social protection in low and middle-income countries has no negative impacts on labour force participation or work effort and does not lead to dependency. Republic of North Macedonia.

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Russian Federation. Cluster D average. Whole sample average. Index of economic freedom. EBRD transition indicator. Public expenditures on education per cent to GDP. Public healthcare expenditures per cent to GDP.

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  6. Social welfare dynamics in post-socialist countries: unveiling the secrets of success;
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  8. Average value. Standard deviation. Western Aid. Phase One: Years Political goal: transformation Economic goal: stabilizat ion. Elimination of arbitrary state controls. Elimination of price controls and subsides; end of collectivization; haphazard privatization. Phase two: years Political goal: from transformation to stabilization Economic goal: from stabilization to transformation.

    What is social protection?

    Formation of stable democratic parties; democratic political culture takes. Large-scale privatization; capitalist lobbies; entrepreneurial culture emerges. Enter the e-mail address associated with your account. Click "send" to have your new password e-mailed to you. Social welfare dynamics in post-socialist countries: unveiling the secrets of success. Graph 1 The interaction of social welfare factors.

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    Graph 2 Division of CEE countries by clusters, Graph 3 Division of CEE countries by clusters, Graph 4 Social welfare dynamics by clusters, Graph 5 Social welfare dynamics for cluster A countries, Graph 6 Social welfare dynamics for cluster B countries, Graph 7 Social welfare dynamics in the cluster C countries, Graph 8 Social welfare dynamics in cluster D countries, Table 1 Results of regression analysis. Table A2 Generalized cluster-wide statistics on social welfare factors, Table A3 Phases of postcommunist transformations according to Z. Table A4 Model for the total sample.

    Table A5 Model for the cluster A countries. Table A6 Model for the cluster B countries. Table A7 Model for the cluster C countries. Table A8 Model for the cluster D countries.

    Typology of Social Protection Programmes

    In this article Abstract 1 Introduction 2 The theoretical basics of research 3 Research methodology. At the end of the 20 th century major modifications were initiated in the countries of Central and Eastern Europe further referred to as CEE. These modifications brought about fundamental transformations of their socio-economic systems. The demise of socialism in these countries is quite a persuasive historical fact that reveals the advantages of a market over a state-controlled socialist economy.

    Nowadays, after almost 30 years of political, social and economic transformations, significant differentiations of socio-economic development in separate CEE countries and in their achieved level of social welfare can be seen. That is why this group of countries provides important empirical material for studying the influence of the building of a market economy on economic growth and social well-being.

    Typology of Social Protection Programmes | WIEGO

    Having in mind that an increase in social welfare itself is the ultimate goal of the socio-economic development of the country, the objectives of our research were, firstly, to assess the scale of variation in social welfare characteristic of CEE countries. Secondly, to find out which economic and political factors determine the success in achieving this goal; this will give an opportunity for a researcher to find an explanation of why some of the countries have made considerable socio-economic progress while others have not.

    The material of the study is structured in the following way: i firstly, we provide a short review of economic literature on the factors affecting social welfare; ii we present data on dynamics and divergences of CEE countries with regard to social welfare; iii we divide countries into clusters and perform a regression analysis that explains the social welfare dynamics in these countries; iv finally, we outline the policy patterns that may be implemented in separate countries in order to ensure sufficient dynamics in their economic and social development.


    It has been concluded that with a high level of economic freedom in a society all strata of the population benefit more or less equally. If the level of economic freedom is low, only specific population strata may benefit Berggren, At the same time, a positive correlation between the level of economic freedom and average income has been revealed Grubel, These conclusions have found support in studies made by many other authors Hanke, ; Leschke, Empirical proof that economic freedom has a positive impact on economic development was found: countries that have advanced market institutions and have shaped open policies in the area of trade and investment tend to be more successful in economic development; on the contrary, countries that slide towards internal markets in conjunction with a high level of state control demonstrate slow growth rates Bhagwati, However, studies that did not show a statistically significant correlation between economic liberty and the increase of social welfare should be also mentioned.

    The ambiguity mentioned above could be explained by the large number of interrelated variables that affect the economic and social development of any country. This fact may explain the inconsistency of the results obtained by the economists in their empirical studies — depending on the set of variables in a model, the time horizon and the size of a sample, the impact assessment of a separate variable will noticeably vary. In particular, Babetskii and Campos presented in their paper the results of a meta-regression analysis where 43 empirical studies on countries with economies in transition were analyzed with a view to identifying the link between market reforms and economic growth.

    They found that out of coefficients characterizing the influence of reforms on socio-economic growth approximately one third turned out to be positive and statistically significant, the second third — negative and statistically significant, the rest — negative and statistically insignificant. Among the reasons that have affected results the authors mentioned model specification, choice of simulation method, etc. While referring to the studies on evolution of the post-socialist economy, we could distinguish in modern economic literature three directions in socio-economic development research that are dedicated to different stages of its evolution in the transformation process: i the transformation recession; ii recovery; and iii growth.

    The main principles of the first direction were formulated by Kornai , Fischer and Gelb , Blanchard , Kremer and Chamon Such changes kick-start the market mechanism start and launch the primary economic incentives for all economic agents. Blanchard , Kremer and Chamon , while explaining the process of transformational recession, emphasized the disorganization caused by the demise of the command economy. Studies of the second direction are focused on the phase of the economic recovery that follows a transformational recession Fisher and Gelb, ; Havrylyshyn, , among others.

    Here, special attention has been paid to the creation of an effective institutional environment for future socio-economic development. Studies of the third direction lay emphasis on a phase of transformational economic growth, and find reflections in the documents of international organizations IMF, EBRD, the World Bank. In particular, they aim to formulate recommendations concerning specific steps for securing economic growth.

    The studies mentioned above applied different methodologies, but got similar results concerning factors which affect the efficacy of economic transformation. Actually, they have all outlined the three main blocks of variables which explain socio-economic development during the transformational change: initial conditions, macroeconomic policy, and structural policy Havrylyshyn, It should be mentioned that many empirical studies offered by modern economists suffer from the methodological flaw of improper identification of economic growth and social welfare.

    We assume that economic growth is only one of the components of social well-being, so studies aiming to uncover the influence of market restructuring on social welfare must take into account a range of other factors. SSWI is calculated according to the formula Sen, , , :. Equation 1 means: the smaller the disparities in incomes achieved, the higher social welfare can be reached at an existing level of per capita income. The index of economic freedom was chosen as a factor that reflects the level of liberty in economic decision making; it has been calculated by the Heritage Foundation HF. Annual publication of this index allows for the way the recent transformations in the governmental policy affect economic freedom.

    The main indicators on which the index is built include HF, :.

    It is worth mentioning that tracking the progress in the development of market institutions is a very tricky thing, as it is rather difficult to choose adequate indexes for its statistical assessment. Thus, such evaluation is often subjective.