Content uploaded by Algimantas Laurinavičius
Author content
All content in this area was uploaded by Algimantas Laurinavičius on Jul 06, 2016
Content may be subject to copyright.
Recenzovaný sborník pĜíspČvkĤ
interdisciplinární mezinárodní vČdecké konference
doktorandĤ a odborných asistentĤ
QUAERE 2012
vol. II
14. ! 18. kvČtna 2012
Hradec Králové, ýeská republika
Mezinárodní vČdecká konference | International Scientific Conference
Výbor konference | Conference Committee:
Doc. Ing. Vladimír Grál, Ph.D.
Prof. dr. Hab. Simon Badur
Doc. Ing. Jan Stivín, CSc.
Prof. Ross Lawsko
Prof. Denis Grun Ph.D.
Prof. PaedDr. Miloš Pánek, Ph.D.
Dr. rer. Nat. René Biegnad
Ing. JiĜí Králík, Ph.D., MBA
Doc. Mgr. Václav Sobota, CSc.
Dr. Piet Vladow
Dr. Piotr OleĞniewicz
Doc. Ing. ZdenČk Závora, CSc.
Doc. Ing. Radim Václavek, CSc.
Mgr. Stanislav Fousek, Ph.D., MBA
Mgr. Vít Tichý, Ph.D.
Ing. Jana Marková, Ph.D.
Ing. Nina Vacková, Ph.D.
Ing. Zuzana Jarná
ýestná záštita | Honorary Patronage:
MUDr. Pavel Horák, CSc., MBA - CEO, Všeobecná zdravotní pojišĢovna
Ing. Martin ŠtČpánek, Ph.D. - Ostrava City
Ing. René Volek - University of Tomáš BaĢa; CEO of RV FASHION STYLE
IBM Czech Republic
Mediální partner konference | Media Patronage:
Univerzita Karlova v Praze | i-Forum
Marketingové noviny journal
Vesmír journal
IT systems journal
Moderní obec journal
Odborné sekce konference | Conference Sessions:
Management, marketing | Management, marketing; Ekonomika, bankovnictví, pojišĢovnictví | Economy,
Banking, Insurance Management; VeĜejná správa a makroprocesy | Public Administration, Macroprocesses;
PĜírodní vČdy | Natural Science; Psychologie, sociologie, pedagogika | Psychology, Sociology, Pedagogy;
Informatika | Informatics; Technologie, strojírenství, stavebnictví | Technologies, Engineering, Building Industry
Editor, úprava, realizace | Edit, Published by:
© MAGNANIMITAS, Hradec Králové, ýeská republika, 2012
ISBN 978-80-905243-0-9
UpozornČní | Warning:
Všechna práva vyhrazena. Rozmnožování a šíĜení této publikace jakýmkoliv zpĤsobem bez výslovného
písemného svolení vydavatele je trestné. | All rights reserved. Unauthorized duplication is a violation of
applicable laws.
Certifikovaná vČdecká konference | Certificate Conference No.: 2259661206
ETTN 085-12-12014-05-2
Reviewed Proceedings of the
Interdisciplinary Scientific Conference
for PhD students and assistants
QUAERE 2012
vol. II
May 14 • 18, 2012
Hradec Králové, The Czech Republic
Q U A E R E 2 0 1 2
M E Z I N Á R O D N Í K O N F E R E N C E | I N T E R N A T I O N A L C O N F E R E N C E
PartneĜi a sponzoĜi konference | Podpora
Conference Partners | Support
Acta Oeconomica Pragensia - Vysoká škola ekonomická v Praze
AD ALTA: JOURNAL OF INTERDISCIPLINARY RESEARCH
GRANT journal
Computer Press
ýeskoslovenský þasopis pro fyziku
EP HARBOUR | European Project Centre
IBM ýeská republika
INOVACE.CZ
IT-Systems
MAGNANIMITAS
MAPLEPARK
Marketingové noviny
Moderní obec - odborný þasopis
KNOWLEDGE NETWORK
Nautillus
RV FASHION STYLE
Statutární mČsto Ostrava
Vesmír - þasopis akademické obce
Všeobecná zdravotní pojišĢovna
Univerzita Karlova v Praze | i-FORUM
4
Q U A E R E 2 0 1 2
M E Z I N Á R O D N Í K O N F E R E N C E | I N T E R N A T I O N A L C O N F E R E N C E
Obsah | Table of Contents
MANAGEMENT, MARKETING | MANAGEMENT, MARKETING
APPLICATION OF TRENDS OF MARKETNIG COMMUNICATION IN INDUSTRIAL ENTERPRISES IN SLOVAKIA
Eva Va•koviþová Zibrínová, Milo• ýambál
16
FINANýNÍ NÁSTROJE V PROJEKTOVÉM ěÍZENÍ: VÝZVA BUDOUCNOSTI
Michaela Zvej•ková
21
ELECTRONIC COMMUNICATION WITH THE CUSTOMER OF POLISH BANKING SECTOR AS A SOURCE OF
COMPETITIVE ADVANTAGE IN VIEWOF CONDUCTED RESEARCH
Anna Tarabasz
27
TOWARDS SMART, GREEN CITIES – RENEWABLE ENERGY RESOURCES’ AND SMART GRIDS’ MANAGEMENT
Marta R. JabáoĔska
35
ANALYZE OF THE QUALITY MANAGEMENT SYSTEM OF CZECH MANUFACTURING COMPANIES WITHIN EACH
PHASE OF PRODUCTS’ LIFECYCLE: INITIAL RESULTS
George Cristian Gruia
44
THE PROPOSAL OF THE PROCEDURE THE IMPLEMENTATION AND THE RETENTION OF THE COLLABORATIVE
MANAGEMENT IN AN INDUSTRIAL COMPANY
Zuzana Kelemenová
53
K PROBLEMATIKE ODLIŠNOSTÍ MEDZI OPEN SOURCE A OTVORENÝMI INOVÁCIAMI
Adam MadleĖák
63
VSTUP SLOVENSKÝCH ZNAýIEK NA GLOBÁLNY TRH
Zuzana Alchusová, Lucia Alchusová
69
WHAT ARE THE MAIN BARRIERS FOR IMPLEMENTING INTRAPRENEURIAL CULTURE IN LARGE
CORPORATIONS?
Monika Barton
73
THE ESSENCE OF SOCIAL MEDIA MARKETING PROJECT FOR MODERN ORGANIZATIONS
Joanna ĩukowska
79
K PROBLEMATIKE CRM NA PRIEMYSELNÝCH TRHOCH
Eva Vicenová
87
VZDELÁVANIE PRACOVNÍKOV AKO PROCES ZDIEďANIA A ZVYŠOVANIA ZNALOSTÍ
Monika Tomþíková, Peter !ivþák
93
VYUŽITIE AUGMENTED REALITY V MOBILNOM MARKETINGU
Ina Mru•koviþová
100
AKTUÁLNÍ TRENDY MANAGEMENTU VE SFÉěE FINANýNÍCH SLUŽEB
Martin Kohel
106
FIREMNÍ KULTURA A JEJÍ VLIV NA ZAMċSTNACE PODNIKU
Ivona Kintlerová
111
5
Q U A E R E 2 0 1 2
M E Z I N Á R O D N Í K O N F E R E N C E | I N T E R N A T I O N A L C O N F E R E N C E
HOW DOES NATIONAL CULTURE INFLUENCE BUSINESS RELATED ISSUES? THE CASE OF CHINA AND POLAND
Agnieszka Sáuszniak
116
PREDICTION MODELS AS A SUPPORT IN MANAGERIAL DECISION MAKING PROCESS
Luká! Falát
124
VÝVOJ OSOBNÍ LETECKÉ DOPRAVY V ZÁVISLOSTI NA EKONOMICKÝCH UKAZATELÍCH S DOPADEMNA
CESTUJÍCÍ
Petra Skolilová
133
MONITOROVÁNÍ PODPORY ZDRAVÍ JAKO SOUýÁST TQM
Andrea Kovardinská
143
VYUŽITIE POZNATKOV Z RIADENIA VÝKONNOSTI V ORGANIZÁCIÁCH VEREJNEJ SPRÁVY
Miroslav Hrnþiar, Zuzana Fabianová
149
OSOBNÍ PRODEJ JAKO NÁSTROJ MARKETINGOVÉ KOMUNIKACE V AUTOMOBILOVÉM PRģMYSLU V
SLOVENSKÉ REPUBLICE
Michaela Ondru!ová
156
MARKETINGOVÁ KOMUNIKÁCIA V MALEJ SPOLOýNOSTI
Ivana Gubrická
164
KNOWLEDGE TRANSFER IN THE ENTERPRISE WITH OUTSOURCING
Magdalena Ciesielska
172
STATUS AND FUNCTION OFF CRISIS MANAGEMENT IN SMALL AND MEDIUM BUSINESSES
Monika Rózsová
179
ANGAŽOVANOSġ ZAMESTNANCOV V SÚýASNOM HYPERKONKURENýNOM PROSTREDÍ
Martina Cehlárová
183
VYBRANÉ ASPEKTY REKLAMY A JEJ VPLYV NA NÁKUPNÉ ROZHODNUTIA SPOTREBITEďOV
Radovan Baþík, Richard Fedorko, SoĖa Bu!ová
188
INTERNATIONALIZATION OF COMPANIES IN SLOVAKIA
ďubo! Valo
195
ANALÝZA MLM FIREM NA ýESKÉM TRHU
Zita Ko!narová
201
MEDIÁLNÍ PRODUKT V PODMÍNKÁCH KONKURENýNÍHO PROSTěEDÍ
Katarína Slivková
211
INTEGRAýNÝ MODEL TRANSFERU PRAKTÍK RIADENIA ďUDSKÝCH ZDROJOV V NADNÁRODNÝCH
SPOLOýNOSTIACH
Ivana Krúpvá
221
CORPORATE IDENTITY VYSOKÝCH ŠKÔL
Elena Nemetzová
227
PLANNING THE IMPLEMENTATION OF CSR STRATEGIES IN SMALL AND MEDIUM-SIZED ENTERPRISES
Vladimíra Juri!ová
234
DÔLEŽITOSġ BUDOVANIA ZNAýKY V PROSTREDÍ VYSOKÝCH ŠKÔL
Katarína Butorová
240
6
Q U A E R E 2 0 1 2
M E Z I N Á R O D N Í K O N F E R E N C E | I N T E R N A T I O N A L C O N F E R E N C E
VYUŽITIE RIADENIA INOVAýNÉHO PROCESU ZALOŽENÉHO NA ZNALOSTIACH V STRATÉGII ROZVOJA
Terézia Horná, Roman Chelchowski
249
BUDOVANIE STRATEGICKÝCH ALIANCIÍ - NOVÝ TREND V GLOBÁLNOM BIZNISE
Kristína Štefanþiková
1258
PROCESNÉ PRÍSTUPY V MARKETINGU PODNIKATEďSKEJ ORGANIZÁCIE
Anna Štefanþiková
268
EKONOMIKA, BANKOVNICTVÍ, POJIŠġOVNICTVÍ | ECONOMY, BANKING, INSURANCE MANAGEMENT
USE OF THE DISCOUNTED CASH FLOW VALUATION METHOD IN PRACTICE
Radim Gottwald
279
INTERNAL AUDIT AND ITS APPROACH TO THE RISK MITIGATION
Vadim Bene"
287
ANALÝZA NEZAMċSTNANOSTI A VÝDAJģ NA POLITIKU ZAMċSTNANOSTI ýR
Robin ýejka
297
TRENDS IN ELECTRONIC BANKING IN THE CZECH REPUBLIC
Lenka Strýþková
305
VLIV POVODNÍ NA POJISTNÉ ŽIVOTNÍHO A NEŽIVOTNÍHO POJIŠTċNÍ V ýR
Robin Koklar
316
ZPģSOBY FINANCOVÁNÍ NNO
Miloslav Hrdliþka, Jaroslav Benák
325
ADVERTISING OF MUTUAL BETTING
Dominik Zbigniew Zygmuntowski
334
MUŽE BÝT SPOLUPRÁCE V OBLASTI MċNOVÉ POLITIKY PRO KRAJINU KONTRAPRODUKTIVNÍ?
Monika Kelemenová
341
VÝVOJ CIEN ELEKTRICKEJ ENERGIE V SR A JEJ VPLYV NA NÁKLADY PODNIKU
Lenka Kalusová
349
PRODUKTÍVNE ZLOŽKY SPOTREBY DOMÁCNOSTÍ SR A ICH AKTUÁLNY VÝVOJ V KONTEXTE
BLAHOBYTU
Marianna Psárska
359
BEZROBOCIE. PODSTAWY TEORETYCZNE A STUDIUM EMPIRYCZNE NA PRZYKàADZIE
GOSPODARKI POLSKIEJ.
Dagmara Kowalska
370
REGIONALIZATION OF SPA INDUSTRY IN THE CZECH REPUBLIC
Lenka Smékalová
376
ECONOMIC BASE OF OPOLSKIE VOIVODSHIP, 2008-2010
Mirosáawa Szewczyk, Agnieszka Táuczak
385
PUBLIC VENTURE CAPITAL FUND IN LITHUANIA: MISSION IMPOSSIBLE?
Antanas Laurinavicius
394
7
Q U A E R E 2 0 1 2
M E Z I N Á R O D N Í K O N F E R E N C E | I N T E R N A T I O N A L C O N F E R E N C E
FIRM DEMOGRAPY: MANUFACTURING IN OPOLSKIE VOIVODSHIP, 2009-2011
Mirosáawa Szewczyk
404
THE RISK OF FINANCING IN THE PROCESS OF CREATING THE STRUCTURE OF CAPITAL
Aneta Michalak
414
VPLYV OPTIMALIZÁCIE PROCESOV POMOCOU IT TECHNOLÓGIE „SAS“ NA ZLEPŠENIE
VÝKONNOSTI BANKOVÝCH ORGANIZÁCIÍ V SR
Miroslava Katonová
422
FISCAL UNION IN THE EUROZONE- REMEDY OR PIPE DREAM?
Justyna Sikora
430
THE QUALITY OF HEALTH CARE SERVICES IN POLAND
– EFFICIENCY EVALUATION
Katarzyna Karwacka
440
ASSET-BASED POLICY: A NEW MEASURE TO REDUCE POVERTY AND INEQUALITY IN BALTIC
STATES
Algimantas Laurinavicius
448
KEY AREAS OF MODERN MANAGEMENT DUE TO PHD COMPETENCIES AND BUSINESS SECTOR
NEEDS
Natalia Borowska, Izabela Richter
456
ASPEKT PERSONALNY W KONTEKĝCIE SPEKTAKULARNYCH STRAT PONIESIONYCH NA
TRANSAKCJACH TERMINOWYCH
Jarosáaw Pawáowski
463
THE APPLICATION OF DIFFERENT SYNTHETIC MEASURES FOR STANDARD OF LIVING
MEASUREMENT
Marta Kuc
470
ECONOMICS THEORY BACKGROUND TO THE ENVIRONMENTAL ACCOUNTING
Sylwia Pakowska
479
CAPACITY AND CAPACITY UTILIZATION: THE CASE OF TRAWLER FISHERIES IN NHA TRANG, VIET NAM
Tang Thi Hien
489
VEěEJNÁ SPRÁVA A MAKROPROCESY | PUBLIC ADMINISTRATION, MACROPROCESSES
MANAGEMENT KONGESCÍ V MċSTSKÝCH AGLOMERACÍCH
Monika Eisenhammerová
499
IMPORTANCE OF INFORMATION AND COMMUNICATION TECHNOLOGIES IN MOTIVATION OF
PUBLIC ADMINISTRATION EMPLOYEES
Jitka PČkná
505
LABOUR MARKET INSTITUTIONS DURING THE TRANSITION THE ANALYSIS OF GENERAL
TENDENCIES
Michaá Pilc
511
8
ASSET-BASED POLICY: A NEW MEASURE TO REDUCE POVERTY
AND INEQUALITY IN BALTIC STATES
Algimantas Laurinavicius
Abstract
The article seeks to establish whether asset-based policy would be useful in Baltic states. A
brief outlook of current social situation in Baltic states is made and the social policy in place
is evaluated. Then, a new direction for social policy - Asset-Based Policy is presented.
Various asset-based policy models implemented in other countries are overviewed and
compared. Taking into consideration identified benefits, inefficiency of current social policy,
economic crisis and austere fiscal policy it is stated that the asset-based policy should be
implemented in Baltic states.
Key words:assets, asset-based policy, inequality, Baltic states
Introduction
Current economic research shows that a public well-being depends not only on the amount of
personal wealth or disposable incomes but on their distribution (or inequality) as well. Income
inequality, high poverty rate prevent development of society and state, have a significant
impact on health and education of residents, conditions of housing and delinquency rate.
Income inequality and wealth disparity may cause political discontent and lead to severe
social disorders.
Income inequality is commonly measured by Gini coefficient, which shows what part of
national income is obtained by the wealthiest residents. A Gini coefficient of 0 expresses
perfect equality where everyone has an exactly equal income; a Gini coefficient of 1
expresses maximal inequality where one person has all the income. The world’s Gini
coefficient is 40; Gini index for the US is 47, and it is only 30 for the EU, which has
implemented a model of social welfare state. However, huge disparities exist between
different EU member states: Gini coefficient varies from 23,8 in Slovenia to 36,1 in Latvia
and 36,9 in Lithuania (2010 data from Eurostat).
It should be noted that economies of Baltic states (Baltic states refer to Estonia, Latvia and
Lithuania) have grown rapidly in the last decade – which should have ensured a better life for
everyone – though changes of Gini coefficient were not significant: a gap between the rich
and the poor did not narrow. Thus, it could be stated that Baltic countries, especially Latvia
and Lithuania, draw more attention to a rapid growth of GDP and not to the equitable
distribution.
Ineffective redistributive policy - which is oriented towards benefits for the poor and not
towards development of their capabilities - is one of the reasons of high income inequality in
the Baltics. The other reason is that the main livelihood of the Baltic residents comes from
work-related incomes (i.e. wages and salaries); therefore they do not take advantage of the
growth of their national economies. Only the rich can buy shares, funds and to take advantage
of the economic growth of their countries. Thus, one of the measures to reduce poverty and
inequality is to reform current social policy, from income support policy to asset-based
policy: i.e. to encourage development of one’s knowledge, skills and abilities, promote
savings, investments and building of assets and to make a possibility for all to become capital
owners.
448
This article seeks to establish whether asset-based policy would be useful in Baltic states. The
methods of the research cover a comparative analysis of scientific literature and a statistical
computation. The article starts with a brief outlook of current social situation in the Baltic
states. Then it presents the concept of the asset-based policy and provides a summary of the
asset-based policy models implemented in foreign countries. Later, results of these policy
models are discussed. The paper ends in conclusions.
1. Income inequality and efficiency of social policy in Baltic states
In 2000-2010 Baltic economies have maintained a rapid growth; incomes grew as well.
However not all types of incomes grew at the same pace. As it could be seen in Figure 1
below, in 2000-2010 nominal GDP grew in Estonia by 132%, in Latvia – by 170%, and in
Lithuania – by 107%. Average net salary (not adjusted to inflation) grew at the same pace,
while stock market – even taking into consideration a deep downturn in 2007-2009 - grew
much more: from 294% in Latvia and 310% in Lithuania to 456% in Estonia (the change of
stock market indexes OMX Riga, OMX Vilnius and OMX Tallinn in 2000-2010; not adjusted
to inflation and paid dividends). Thus, if we imagine that our human capital (i.e. our
experience, knowledge, talents etc.) is an asset which gives us work-related incomes, we
could say that its value grew 2-3 times in the last decade, while the value of financial assets
invested in Baltic stock markets, rose 4-5 times.
Figure 1. Change of nominal GDP, monthly net salary and stock prices in Baltic
countries in 2000-2010 (not adjusted to inflation) (Source: Statistics Estonia, Central
Statistical Bureau of Latvia, Statistics Lithuania and authorial computation)
However, neither rapid economic growth, nor stock market boom have reduced social
inequality in the Baltics. In a table below, it could be seen that only Estonia in 2005-2010
decreased its Gini coefficient from 34 to 31, while it remained stable in Latvia and rose in
Lithuania. Poverty rate decreased only in Estonia, it remained stable in Lithuania and it rose
in Latvia. It should be noted that Gini coefficient and poverty rate of all 12 New Member
States converged towards EU average, while in Latvia and Lithuania they remained far from
European average.
Table 2. Gini and At-risk-of-poverty rates in Baltic countries
Country
Gini coefficient (for incomes), %
At-risk-of-poverty rate, %
2005
2010
ǻLQSS
2005
2010
ǻLQSS
449
EU
30,6
30,5
-0,1
16,4
16,4
0,0
New Member States (12)
33,2
30,3
-2,9
18,9
16,9
-2,0
Estonia
34,1
31,3
-2,8
18,3
15,8
-2,5
Latvia
36,1
36,1
0,0
19,2
21,3
2,1
Lithuania
36,3
36,9
0,6
20,5
20,2
-0,3
Source: Eurostat and authorial calculation
Taking into consideration these indicators, it could be concluded that the social policy in
place didn’t bring a break-through in a fight against poverty and inequality in Baltic states,
especially in Latvia and Lithuania. It should be noted, that different growth rates of different
assets (e.g. stock prices vs. work-related incomes from human capital) and ineffective
redistributive policy amplifies social inequality even more.
That is why, in order to reduce inequality, current social policy should be reformed, and the
current income support (or income security) policy should be replaced by the asset-based
policy which stresses development of capabilities, savings, investments and building of assets.
2. New direction for social policy
It should be noted, that traditional methods dealing with poverty and social inequality focus
on issues of income and consumption, with particular importance given to the idea of
progressive taxation and increase of various benefits to the poor. These actions, called income
security or income support policy, have to support individuals when they have insufficient
income, face difficulties, whether temporary or constant ones, including unemployment,
health problems, accidents or old age. Notably, income security was effective policy measure
at the time, when national economy offered a number of stable and long-term jobs, providing
regular income to majority of its population. Income security policy however is a passive one:
it supports individuals in distress; however, it is not intended to develop their possibilities
(Sherraden, 2002, 2003). Besides, income support policy ignores several especially important
aspects:
1) various support and benefit programs, aimed at exclusively the poor, strongly reduce the
stimuli to work in official labor market, are stigmatizing and are deepening social gap
between different social groups more than promoting solidarity
2) even very progressive taxation cannot ensure proper equality since a considerably larger
inequality exists not in the income of individuals but in their accumulated assets. The US
research showed that a median white had about 50% higher income than a median African
American or Latino, meanwhile, the net assets of a median white was even 1000% (11
times) higher than those of an African American or Latino (Oliver, Shapiro, 2006;
Lawerence et al., 2007);
3) transfer of benefits to the poor does not reduce a pre-transfer poverty rate (Danziger,
Plotnick, 1986);
4) instead of introducing additional taxes for the rich which would promote evasion and
giving new additional benefits to the poor frustrating their initiative, it would be better to
give everybody more or less equal starting possibilities.
Modern, post-industrial economy needs active social policy, encouraging personal
development and providing motivation for development of one’s knowledge, skills and
abilities. Latest proposals no longer limit themselves with idea of consumption as a measure
of well-being going toward what A. Sen (1993, 1999) identifies as capabilities. According to
A. Sen, a concept of capabilities is closely related to personal freedom of choice and ability to
carry out one’s potential to the fullest.
450
Therefore, despite the fact that income or consumption are still most widely used measure of
poverty in social policy, lately efforts were made to develop a vision on combating poverty
and social inequality, based on saving, investment and accumulation of asset. Concept,
stressing long-term individual possibilities, based on certain asset level, is called asset-based
policy. (Sherraden, 1991). Notably, asset-based policy does not envisage replacing current
income security policy, which is a core idea of a welfare state. Both policies can mutually
contribute, seeking their goals: benefits received maintain consumption, while the asset
accumulated may encourage personal financial freedom and recovery from poverty. To put it
briefly, asset-based policy is one that encourages individuals to save and accumulate asset, to
improve, develop one’s knowledge, skills and capabilities, thereby contributing to the growth
of the national economy and progress of its society (Emmerson, Wakefield, 2001; Loke,
Sherraden, 2006, 2008). Therefore, only both policies, based on asset and income, when
applied together, can help reaching mutually contradictory goals of fair social policy and high
economic efficiency, thereby cutting the price of trade-off between economic growth and
social development.
In the last decade, several countries have focused their social policy in this direction and have
started implementing universal asset-based policy. Unfortunately, Baltic states are not on that
list, neither are other Central and Eastern Europe (hereinafter CEE) countries.
3. Asset-based policy: from theory to practice
Various authors have come up with several different methods to implement asset-based
policy:
1) benefits to new-borns: one-time transfers by the government to child development
accounts opened to all new-borns (hereinafter CDA) (Kelly, Lissauer, 2000);
2) matched savings accounts for the poor and transfers by the government, that match at a
certain ratio and to a certain limit the personal savings, transferred to these accounts
(Sherraden, 1991);
3) one-time grant to all individuals reaching majority (Nissan, Le Grand, 2000; Ackerman,
Alstott, 2005);
4) regular monthly benefits for all citizens of a country, after reaching majority (Van Parijs,
2005).
It should be noted, that these proposals envisage fairly different implementation of asset-
based policy, however all of them focus on the same goal, i.e. to accumulate a certain amount
of asset, escape from regular cycle of benefits, consumption and poverty, encourage
development of personal capabilities and as a result, a better development of entire society
and national economy.
Interest in asset-based welfare became increasingly popular throughout the world in the last
decade of 20th century. Efforts have shifted from scientific research to practical
implementation of ideas:
1) In Great Britain, in 2005 the program of the Child Trust Fund (hereinafter CTF) was
introduced which ensured that all children born on or after 1st September 2002 would
receive a voucher of 250 pounds (an extra 250 pounds voucher was given for newborns
from low-income families) and an additional voucher when reaching 7 years (and possibly
11 years). CTF funds were intended to be invested for a long-term period and managed by
parents/legal guardians until a child reached the age of 16. At this point, a child would
have an option to take over the management of his account but he would still not be able
to withdraw funds from the account until he reached 18. It should be noted, that this
program was stopped since 2011 due to the financial crisis.
451
2) Since 1998 in 40 states of US a program of Individual Development Account (IDA) has
been active. It ensures that the savings of low-income families are in a certain ratio (1:1 to
1:3) matched with public funds. In a certain time (usually once in 4-5 years) savings can
be used to purchase a first home, to pay post-secondary education, or to start or expand
small business.
Other industrialized nations which have more or less developed models of asset-based policy
include Canada (CDA), Singapore (coherent program of life-long asset accumulation), South
Korea (CDA and savings accounts to the poor) and Hong Kong (CDA). There are pilot
programs in Taiwan (savings accounts to the poor) and USA (CDA in Oklahoma; draft
legislation for universal CDA policy at national level).
The table below briefly presents key features of these policies.
Table 2. Asset-based policies in selected countries
Country
Name of
accounts /
program Status Beneficiaries Scope Benefits
UK
CTF terminated children (0-18 years) universal
Benefit by the Government at birth
and reaching 7 and 11 years
Canada
RESP
(CESG and
CLB)
in progress
children (CESG: 0-18
years; CLB: 0-21
years)
universal
Benefit by the Government to the
new-borns from poor families;
matching funds for private savings
USA
KIDS
expected
children (0-18 years)
universal
Benefit by the Government at birth;
matching funds for private savings
(for the poor only)
USA
SEED OK
in progress
(pilot)
children (0-7 years)
1360 newborns in
Oklahoma, USA
Benefit by the Government at birth;
matching funds for private savings
(for the poor only)
USA IDA
in progress
(pilot)
low-income
individuals
selective; low-income
families Matching funds for private savings
Singapore
Baby
Bonus,
Edusave,
PSEA in progress
children (Baby
Bonus: 0-6 years;
Edusave: 6-16 years;
PSEA: 7-20 years) universal
Benefit by the Government at birth
and until the age of 20; matching
funds for private savings
South
Korea
KCDA
in progress
children (0-18 years)
as at the end of 2010,
~41 000
institutionalized
children
Matching funds for private savings
South
Korea
Hope
Accounts
in progress
low-income
individuals
~13 000 individuals
from low-income
families in Seoul
Matching funds for private savings
Taiwan
TFDA
in progress
(pilot)
low-income
individuals
selective (not
specified)
Matching funds for private savings
Hong
Kong
CDF in progress children (10-16 years)
Intended for ~13 600
children from low-
income families Matching funds for private savings
Source: Kim et al., 2010; Han, 2009; Zou, Sherraden, 2010; Sherraden, Stevens, 2010;
Sherraden, 2008; Richards, Thyer, 2011 and authorial computation
All these policies are characterized by the fact that there is accumulation of funds in an
investment account for a certain period of time (in case an account is opened to a new-born,
the funds are mostly accumulated until he/she reaches majority; if an account is opened to a
low-income individual, funds are mostly accumulated for 2-4 years), using support of the
Government (one-time benefits or matching funds); later on, these funds can be used for a
predetermined purpose: mostly for education, housing or starting a small business. Only CTF
program that operated in the United Kingdom included no restrictions to the use of
accumulated funds.
452
The first results of saving / investment / asset accumulation programs suggest that the asset-
based policy increases individual saving rate, financial literacy and may have positive
attitudinal, behavioral, and social effects (Scanlon, Adams, 2009). The most important
conclusion is that low-income individuals and families can save, if they participate in saving
programs and are provided with information, certain benefits and access to corresponding
institutional structures (Mason et al., 2009). How can they accomplish it? The studies have
showed that families facing severe financial difficulties can modify their consumption habits
and come up with various innovative methods in order to save funds in an investment account
of their child (Adams, Whitman, forthcoming).
Besides, it was found out that young people who had even a small stake of private equity at
the beginning of their full age, 10 years later would have a large advantage over those who
had no equity. This advantage is expressed in lower unemployment level, higher salary and
better health. Possession of even a small equity encourages people to invest, save and think
about future, and gives them psychological and economic independence (Le Grand, 2010).
Overview of key cases of asset-based policy makes an impression that this policy is tested and
implemented in Anglo-Saxon countries and South-East Asia, where the countries have
historically inherited or try to imitate the same model of society and social protection (it
should be noted, that certain products of asset-based welfare are offered in some other Asian
and African countries, however they are provided mostly by commercial institutions,
therefore they do not amount to a national policy). This impression is mostly correct: so far,
no continental Western European country has carried out similar experiments of asset-based
policy (they have a strong welfare state and a well-developed social protection in place);
neither has any CEE or Baltic country (these countries traditionally follow their Western
neighbors, trying to implement the same welfare state models).
When considering, whether asset-based policy would be necessary in Baltic states, one must
keep in mind that these countries are relatively poor, so they will find it hard to create and
maintain the costly welfare economy given current economic difficulties and ever more
austere fiscal policy conditions. Besides, Greece provides a good example, how the welfare
economy over-financed for years discourages efficiency and productiveness and ruins the
country.
The new social policy based on the principles of saving, investing and asset building could be
a good measure to bring a break-through in a combat against poverty and inequality in the
Baltics.
Conclusions
1) Neither rapid economic growth, nor stock market boom have reduced poverty and social
inequality in the Baltics: inequality and poverty indicators in Latvia and Lithuania remain
far from European average.
2) Current income support (or income security) policy is a passive one: it supports
individuals in distress; however, it is not intended to develop their capabilities. Thus, it
should be replaced by an active social policy, which stresses development of capabilities,
savings, investments and building of assets.
3) A concept, stressing long-term capabilities, based on certain asset level, is called asset-
based policy. During the last decade, several countries started focusing their social policy
towards a universal, asset-based policy.
4) The first results of asset accumulation programs suggest that this policy increases
individual saving rate, financial literacy and may have positive attitudinal, behavioral, and
social effects. Even low-income individuals and families are capable to save.
453
5) To-date, no continental Western European country has tried to implement asset-based
policy; neither have CEE or Baltic countries.
6) Identified benefits of the asset-based policy, high level of poverty and social inequality,
economic crisis and austere fiscal policy are the main assumptions to start reforming
current social policy in Baltic countries.
Sources
1. ACKERMAN, B., ALSTOTT, A., VAN PARIJS, P. Redesigning Distribution: Basic
Income and Stakeholder Grants as Cornerstones for an Egalitarian Capitalism. London:
Verso, 2005.
2. ADAMS, D., WITTMAN, L. SEED parent survey (SEED Research Report). Lawrence,
KS: University of Kansas School of Social Welfare, forthcoming.
3. DANZIGER, S., PLOTNICK, R. D. Poverty and policy: Lessons of the last two decades.
Social Service Review, March 1986.
4. EMMERSON, C., WAKEFIELD, M. The Savings Gateway and the Child Trust Fund: is
asset-based welfare "well fair"? London: The Institute for Fiscal Studies, 2001.
5. HAN, C. K. Inclusive Asset-building Policy in Korea, Singapore, and Taiwan: Trends
and Policy Implications. An International Conference „Asian Social Protection in
Comparative Perspective“ Singapore, 2009.
6. KELLY, G., LISSAUER, R. Ownership for All. London: IPPR, 2000.
7. KIM., M. Seoul Hope Plus Savings Accounts. CSD Working Papers. St Louis, MO:
Center for Social Development, Washington University, 2010.
8. LAWERENCE, M., BERNSTEIN, J., ALLEGRETTO, S. The State of Working America.
Washington: Economic Policy Institute, 2007.
9. LE GRAND, J. We must not sacrifice the child trust fund. The Guardian, 28 April 2010.
10. LOKE, V., SHERRADEN, M. Building assets from birth: A comparison of the policies
and proposals on Children Savings Accounts in Singapore, the United Kingdom, Canada,
Korea, and the United States. CSD Working Paper No 06-14. St Louis, MO: Center for
Social Development, Washington University, 2006.
11. LOKE, V., SHERRADEN, M. Building assets from birth: A global comparison of Child
Development Account policies. CSD working paper 08-03. St Louis, MO: Center for
Social Development, Washington University, 2008.
12. MASON, L. R., NAM, Y., CLANCY, M., LOKE, V., KIM, Y. SEED account
monitoring research: Participants, savings, and accumulation. CSD Research Report 09-
05. St Louis, MO: Center for Social Development, Washington University, 2009.
13. NISSAN, D., LE GRAND, J. A Capital Idea: Start-up Grants for Young People. London:
Fabian Society, 2000.
14. OLIVER, M., SHAPIRO, T. Black Wealth/White Wealth. New York: Routledge, 2006.
15. RICHARDS, K. V., THYER, B. A. Does Individual Development Account Participation
Help the Poor? A Review. Research on Social work practice, 2011. - Vol. 21, Issue: 3. -
p. 348-362.
16. SCANLON, E., ADAMS, D. Do assets affect well-being? Perceptions of youth in a
matched savings program. Journal of Social Service Research, 2009. – Vol. 35. – p. 33-
46.
17. SEN, A. Capability and well-being. In M. Nussbaum, A. Sen (Eds.), The quality of life
(pp. 30-53). Oxford: Clarendon Press, 1993.
18. SEN, A. Development as freedom. New York: Knopf, 1999.
19. SHERRADEN, M. Assets and the poor: A new American welfare policy. Armonk, NY:
M.E. Sharpe, 1991.
454
20. SHERRADEN, M. From a social welfare state to a social investment state. In C. Kober,
W. Paxton (Eds.), Asset-based welfare and poverty: Exploring the case for and against
asset-based welfare policies (pp. 5-8). London: Institute for Public Policy Research, 2002.
21. SHERRADEN, M. Individual accounts in social security: Can they be progressive?
International Journal of Social Welfare, 2003. – Vol. 12. - p. 97-107.
22. SHERRADEN, M. IDAs and Asset-Building Policy. CSD Working Papers. St Louis,
MO: Center for Social Development, Washington University, 2008.
23. SHERRADEN, M., STEVENS, J. Lessons from SEED, a National Demonstration of
Child Development Accounts. [Online], 2010, http://csd.wustl.edu/Publications/.../
SEEDSynthesis_Final.pdf
24. ZOU, L., SHERRADEN, M. Assets for children: Experiences in Asia and implications
for China. US-China Education Review, August 2010. – Vol. 7. No.8.
Contact
Algimantas Laurinavicius
Vilnius University, Department of Economics
Sauletekio al. 9, Vilnius, Lithuania
Tel: +3790 698 73399
email: algislaur@gmail.com
455
ISBN 978-80-905243-0-9
ETTN 085-12-12014-05-2
Vydání 2., 2012
PĜíspČvky publikované v tomto sborníku vyjadĜují názory a stanoviska nezávislých autorĤ. | Papers published in
this conference proceedings express the viewpoints of their independent authors.
Tato publikace neprošla redakþní ani jazykovou úpravou.
