Social transfer expenditures in Republic of Macedonia, South East European countries and EU countries

Abstract

Social transfers and expenditures as a form of social protection are essential for each economy and society to function properly. Social transfers as a form of social protection can vary in dependence of the economic system and development of the country, but initially their purpose is relatively the same. Tackling poverty and enabling efficient social redistribution of the income among the households are one of the main results of the existence of an efficient social protection system. The economies of today are confronted with a serious challenge of tackling the rising poverty and income inequality in the world and one of the means of achieving that is through the social transfer system. In this article a comparison analysis is made between the social transfer expenditures of Republic of Macedonia, South East European countries and EU countries in order to determine the trends and amount of social transfer expenditures in the countries. From the research in this paper it can be seen that Republic of Macedonia has considerably smaller social transfers per capita compared to other countries taken into consideration for the research. More so Republic of Macedonia is the only country form the countries that are part of the comparison analysis that accomplishes negative growth of the social transfer expenditures as a percentage of GDP in the period of year 2001 till year 2014. Knowing the fact that the more equal distribution of assets in a current country can lead to increased consumption, sustainable growth and increases social welfare, Republic of Macedonia can do better if the expenditures for social transfers as a percentage of the GDP are to increase, even on expense on some other public or budget expenditures.