Transition to a market-oriented economy necessitated a structural modification of all functions of the state, including budget resource allocation, targeted to limiting state participation in the country’s economy. Despite the ongoing reformation and restructuring at all levels of the economy towards the private sector development and a gradual increase in private ownership, the government remains a monopolist in social service delivery.
The paper aims to identify the distributional impact of pro-poor public policies in education, health and social assistance, where the government is identified as a main service provider. The paper assesses the share of public expenditures in the mentioned sectors allocated to different income quintiles of the population using the Benefit Incidence Analysis method.
The author tries to find out to what extent government spending reach the targeted vulnerable groups of the population and are relevant to the declared poverty reduction goals in the country.
Major findings of the paper are:
education and science receive the highest share of the governments’ total social expenditures
state participation differs among educational levels
there are significant social and economic disparities between the different regional units
structural changes in political and economic systems led to the sharp decrease in the government health expenditures
Armenia has the lowest utilization rates of healthcare services among the CIS and CEE countries
'Basic Benefit Package' consisted of two types of free services was created
healthcare sector has some specific differences comparing to other social sectors from the regional perspectives
'Family Poverty Benefit' system was introduced to provide cash transfers for household considered extremely poor
The author claims that significant social and economic disparities between the different regional units in the country dictate diversified approaches in public policies aimed to generate equal outcomes for the population. The same level of benefits provided to all households certifies poor and ineffective addressing mechanisms used by the Government in designing and implementing public policies aimed to target the vulnerable groups of the society.