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Social Welfare in Post-Soviet Armenia: From Socialist to Liberal and Informal?

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Abstract

A drastic shift from strong social citizenship rights to a liberal, privatized, informal welfare model took place in post-Soviet Armenia. Drawing on the Armenian National Statistical Service's 2005 Integrated Living Conditions Survey and research conducted by the Armenian government and international agencies, this article evaluates the system of social welfare in post-Soviet Armenia. It identifies the direction of social policy reform during the transition, considering welfare institutions, levels of social provision, and outcomes. The roles of the labor market, the state, and the informal sector in delivering social welfare are discussed. The Armenian welfare system is classified in terms of current conceptual frameworks for welfare systems.

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... From the beginning of transition and the rollback of welfare regimes in the post-socialist countries, the main question welfare scholars had been asking was 'in what direction are the post-socialist welfare states developing?' Thus, much of the research on post-socialist welfare state in 1990s and early 2000s focused on the classification of welfare state regimes in Central Eastern Europe and former Soviet Union: on whether they are converging with welfare state regimes of Western Europe and on the extent to which these regimes continue to be influenced by socialist legacies (Aidukaite, 2006;Deacon, 2000;Fenger, 2007;Toots & Backmann, 2010;Wagener, 2002). It was generally accepted that the welfare state in post-socialist countries can be characterized by the residualization of welfare states and the individualization of social risks following the adoption of neoliberal policies (Babajanian, 2008;Ferge, 1997;Polese et al., 2014). At the beginning of the transition in the early 1990s, all of the states in the region started out with comparatively generous welfare state provisions, which had been consequently reduced and contracted, resulting in most cases in inadequate welfare coverage. ...
... Most of the countries of this region, including Azerbaijan, Turkmenistan, Tajikistan, or Uzbekistan, were considered 'laggards' in terms of social policy reform (Deacon, 2000), and rarely merited individual focus. However, the few available studies on the Caucasus and Central Asia suggest that the concepts of welfare state and welfare regime are not easily applicable to these countries (Babajanian, 2008;Collier & Way, 2004;Gugushvili, 2010;Habibov & Fan, 2007;Urinboyev, 2011). The welfare mix in these countries includes components that are rarely taken into account by the welfare state regime approach, such as family support, mutual aid networks, remittances of labor migrants, international aid, or local self-governance institutions such as Uzbek mahalla (Babajanian, 2008;Gugushvili, 2010;Urinboyev, 2011). ...
... However, the few available studies on the Caucasus and Central Asia suggest that the concepts of welfare state and welfare regime are not easily applicable to these countries (Babajanian, 2008;Collier & Way, 2004;Gugushvili, 2010;Habibov & Fan, 2007;Urinboyev, 2011). The welfare mix in these countries includes components that are rarely taken into account by the welfare state regime approach, such as family support, mutual aid networks, remittances of labor migrants, international aid, or local self-governance institutions such as Uzbek mahalla (Babajanian, 2008;Gugushvili, 2010;Urinboyev, 2011). Many of these elements are either informal (mutual support networks, remittances) or located at the border of the formal and the informal (mahalla system in Uzbekistan). ...
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... In contrast to the friendship-centred informal networking of Russia and other Eastern parts of the former Soviet Union, most of informal networks of the contemporary Caucasus are kinship-based. Connections to the immediate family and kinship circles have been described by many researchers Babajanian, 2008;Hasanov, 2009;Sokirianskaia, 2005;Valiyev, 2011) as of particular importance for the daily lives 5 Anonymous, interview, Baku, September 2013. of the Caucasus's residents in most areas of the region. In both clan-centred societies of the North Caucasus's highlands and kinship or ethnicity-based social structures of South Caucasus, reliance on family circles, reinforced by decades of communist persecution, provided the population with coping mechanisms and social safety nets throughout the Soviet and post-communist periods Bobrovnikov, 2006a;Platz, 1995). . ...
... were widespread in the Soviet Caucasus (Feldbrugge, 1984: 541;Greenslade, 1980;O'Hearn, 1980: 225-26;Ofer, 1980: 65-66;Sampson, 1987: 126-27), a growing body of literature has also demonstrated that informal groups of present-day Caucasus are omnipresent and that their functions and organization are very similar to the communistage networks Babajanian, 2008;Sokirianskaia, 2005). One question that needs to be answered, however, is whether present-day informal networks are affected by the former regime's legacy or are they a post-communist phenomenon. ...
... The fourth group refers to former socialist countries or the former Soviet Union, e.g., Armenia, Georgia, and Ukraine. Their welfare systems are characterized by the fact that an ideological transition from a communist model with universal social insurance and public services to a privatized model is not complete (Babajanian, 2008), giving room for the informal sector to compensate for the malfunctioning of state actors. ...
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... While the social model is not without its critics (Owens 2015), it does constitute a valuable conceptualisation, not least because it continues to inform the United Nations' human rights approach 2 and is endorsed by disabled people's movements around the globe (Tsai et al. 2010;Fontes 2014;You & Hwang 2018). The difference between the medical and social models has major implications for the nature of contemporary welfare provision and whether social policy in the post-Soviet space promotes medical model dependency or social model empowerment and independent living (Babajanian 2008;Becker & Merkuryeva 2012). ...
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In response to international concerns about ongoing rights violations, this study presents a comparative analysis of state and civil society organisations’ discourse on the early phase implementation of the United Nations Convention on the Rights of Persons with Disabilities (PWD) in the Commonwealth of Independent States. The findings show that PWD continue to experience rights-denial and barriers to shaping policy and accessing social welfare. There is a ‘disconnect’ between state and civil spheres that hampers effective implementation and explains the endurance of the medical model of disability across the post-Soviet space.
... The next step involved a back and forth examination of each output as single case studies (e.g. Babajanian, 2008;Kim, 2008;Sumarto, 2017, Ehmke, 2019 and theoretically focused outputs that did not engage with classification debates (e.g. Plagerson and Patel, 2019) were omitted. ...
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... At the same time, his charity also contrasted with state provisions in certain ways. Thus, given the drastic decrease of state welfare in the post-Soviet period (Babajanian 2008a), citizens widely associated state support with lack of resources, narrow eligibility criteria, exclusion of the needy, corruption and bureaucratic hassle, even if state provisions were some poor families' main source of income and in rare cases were quite substantial (Baghdasaryan 2014(Baghdasaryan , 2011 In contrast to this, as the above cases illustrate, Aramian's provisions had the appearance of abundance, lavishness or even luxury, of which people could sometimes partake. In spite of some encounters with rude intermediaries, many informants associated these provisions with ease and good organization, inclusive, and also vague and particularistic eligibility criteria (giving preference to oligarch's compatriots), informality, and strong control of intermediaries who distributed resources without withholding them. ...
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... Armenia and Georgia have experienced the highest increase of inequality levels since the 1990s (Mkrtchyan, 2006, World Bank, 2009), which should be reflected in socio-economic positioning in society as the central cleavage in welfare preferences. In addition to the job-less growth and structural problems in economy, this tendency is also related to the minimalist and informal welfare programmes continuously implemented by their governments (Babajanian, 2008, Posarac et al., 2008. For demographic dimension of welfare preferences, the high old-age dependency ratios 8 in Ukraine, Georgia and Belarus (World Bank, 2009) might indicate on a potential conflict of interests between generations. ...
... The processes described by Babajanian (2008) for social welfare in general also apply to housing provision. Despite the fact that by definition all citizens and refugees without permanent housing are eligible, the criterion for inclusion in the current programme is extreme need, and for the moment, the provision is only intended for a small number of needy recipients. ...
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The first part of this paper offers a cumulative review of the changes in global objectives and operating principles and their global consequences, characteristic of the shift from the ideal type of the modern welfare state to the neo-liberal or post-modern paradigm. The paper then spells out some of the implications of this shift for social security in the “transition countries” of Central and Eastern Europe. The tendencies (from marketization to the spread of means-testing) are similar to those in the West; but they are much more marked and there is much less political and popular resistance to these changes. One of the crucial ingredients of the shift is the undermining of the age-old solidarity between generations, a trend also strongly recommended by the supranational agencies. The “catch”, or the “paradox of democracy” is that, for all the lack of resistance, people do not seem to approve of the rapid withdrawal of the state and the loss of their existential securities.
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Studies of the informal economy in the Third World have evolved toward defining the informal sector in relationship to the state. This article analyzes some activities that escape the control of the state, with special attention to centrally planned economies. Informal exchanges include bureaucratic favors (“connections”), clientelism, different forms of corruption, and the “parallel” system of production and marketing. I show that economic laws are not sufficient to understand the logic of these economies.
Article
This paper examines the impact of a decade of transition on living standards and welfare in Central Asia and the Caucasus. Following independence in 1991 all countries suffered a sharp decline in GDP per capita, with levels in some countries falling to below a quarter of the pre-transition level. Since then, all countries have experienced positive economic growth. The key questions are whether this growth has been accompanied by declines in inequality and poverty and, if so, how sustainable are these improvements. There is some evidence that recent growth has benefited the poor. However, at the start of the new century, an estimated 39 million people in Central Asia and the Caucasus were living in poverty, of whom over 14 million were living in extreme poverty. Moreover, there is evidence of growing inequalities in terms of access to health and education services, with implications for future human development. Continuing poor governance within the region represents a major barrier to future poverty reduction.
Article
This paper compares the system of social maintenance and insurance in the Soviet Union, which was in force in the three Baltic countries before their independence, with the currently existing social security systems. The aim of the paper is to highlight the forces that have influenced social policy transformation from its former highly universal, however authoritarian form, to the less universal, social insurance-based systems of present day Lithuania, Latvia and Estonia. It will be demonstrated that the welfare–economy nexus is not the only important factor in the development of social programs. Rather, social policy should be studied as if embedded in the political, historical and cultural aspects of a given society. The people’s attitude towards distributive justice will be highlighted as being one of the most important factors for either social policy shortcomings or expansion. This paper takes steps to combine quantitative and qualitative data.
Article
Beginning from the framework of welfare state regimes in rich capitalist countries, this article radically redefines it and applies the new model to regions and countries which experience problematic states as well as imperfect markets. A broader, comparative typology of regimes (welfare state, informal security, insecurity) is proposed, which captures the essential relationships between social and cultural conditions, institutional performance, welfare outcomes, and path dependence. Using this model, different regions of the world (East Asia, South Asia, Latin America, and sub-Saharan Africa) are compared. For many poorer, partially capitalized societies, people’s security relies informally upon various clientelist relationships. Formalizing rights to security via strategies for de-clientelization becomes a stepping stone to protecting people against the insecurity of markets.
Article
Many researchers and commentators underestimate the length and importance of the time lags between initial research investment and ultimate impacts on the development and adoption of technological innovations. In both econometric studies of productivity and ex post and ex ante benefit-cost evaluations of research investments, researchers typically impose untested assumptions about the R&D lag, which can have profound implications for the results. In this paper we present a range of evidence on agricultural R&D lags including both aggregative analysis of U.S. agricultural productivity using time series data, and some specific details on the timelines for the research, development, and adoption processes for particular mechanical and biological innovations in U.S. agriculture. The aggregative analysis makes use of a comparatively rich state-level data set on U.S. agriculture that makes it possible to test hypotheses about the R&D lag and to evaluate the implications for the specification of models of production and for findings regarding the rate of return to public research investments. The results support the use of a longer lag with a different shape than is typically imposed in studies of industrial R&D. These findings are supported by the timelines for specific technological innovations, including new crop varieties, as well as tractors and other mechanical innovations.
Article
In the past few years the informal sector in countries in transition has increasingly become the focus of research, public policy and the media. The term 'informal sector' has been used to describe an extremely wide spectrum of activities, which do not necessarily have much in common, such as tax evasion, corruption, money laundering, organised crime, bribery, subsistence farming, barter, petty trade, and the stealing of state property. This is problematic for the design of public policy as these activities may raise very different (and conflicting) policy issues. This paper provides a framework with which to analyse these different types of 'hidden' activities in order to design appropriate social, labour market, fiscal, and other policies. We build on the concepts and definitions of the System of National Accounts (1993), to develop a new conceptual framework that distinguishes between four types of 'hidden' activities: informal activities, which are undertaken 'to meet basic needs';underground activities, which are deliberately concealed from public authorities; illegal activities, which generate goods and services forbidden by the law; and household activities, which produce goods and services for own-consumption. We provide an example of how this concept of informal activities can be operationalised to analyse informal employment, and apply it to the Georgia Labour Force Survey (1999) data. Preliminary results reveal that more than half of Georgia's employed population works informally.
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