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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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