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33 J. Soc. & Soc. Welfare 203 (2006)
Social Assistance and the Challenges of Poverty and Inequality in Azerbaijan, a Low-Income Country in Transition

handle is hein.journals/jrlsasw33 and id is 203 raw text is: Social Assistance and the Challenges of Poverty and Inequality in Azerbaijan, a low-income country in transition NAZIM N. HABIBOV LIDA FAN Although low-income countries in transition are facing the challenges of poverty and inequality, evidence on the performance of safety nets in these countries is scarce. This article uses micro-file data from a nationally representative household budget survey to analyze the existing social assistance programs in Azerbaijan, a low income country in transition, from the perspectives of poverty and inequality reduction. The empirical evidence presented in this paper indicates that the poverty and inequality reduction effectiveness of social assistance programs is inadequate. First, the benefits are very modest and the poor receive only a small proportion of them. Second, some programs are not aimed at poverty reduction by design. Third, the heterogeneous nature of poverty and the significant scale of shadow economy during transition make the identification of the poor complicated. Finally, the existing patchwork of numerous programs with small-scale benefits is costly and administratively demanding. A consolidated and better designed social assistance program is needed to effectively tackle the challenges of poverty and inequality in Azerbaijan. Keywords: Income distribution, welfare, poverty, inequality, safety net, social assistance, transition, and Azerbaijan Starting with the same ground of the Soviet-style social as- sistance of the 1990s, countries of the former Soviet block have demonstrated divergent patterns in reforming their social welfare safety nets. However, most of the literature regarding social as- sistance reform focuses on the Baltic or Slavic countries, while the development of social assistance systems in the low-income tran- sitional countries of Central Asia and Caucasus has been largely Journal of Sociology and Social Welfare, March, 2006, Volume XXXIII, Number I

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