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Journal number 1 ∘ Rozeta Asatiani

Expanded Summary

“Great depression” which brought unemployment and poverty to millions of people had led to progressive outlook changes of the society in many countries and laid the foundations for building of welfare state.
Before the “Keynesian revolution”, welfare state was perceived as a “third road” between two extremes – strictly regulated of that time socialism and uncontrolled, unregulated laissez-faire capital- ism. The English sociologist Thomas Marshall in his work “Citi- zenship and Social Class” described the modern welfare state as a distinctive combination of democracy, welfare and capitalism. In his view citizenship must encompass access to social as well as to civil and political rights; hence the term welfare state should be used in relation to those countries where social rights are accompanied with civil and political rights [Marshall T. 1950].
In the centre of the research on the welfare state theory is the mechanism of distribution and redistribution of government expenditures and transfers. Government expenditures are divided into three major groups: the first, provision of social assistance to that part of the population that cannot support themselves independently; the second, mandatory insurance in case of disease or unemploy- ment; the third, the state assumes the responsibility to provide socially unprotected strata with the necessary food and services.
The state should not allow an impoverishment of a significant part of its population and should make public property available to everyone equally. It is due to this, that the “state welfare theory” makes emphasis on the mechanism of the government expenditures and transfers concerning the fact as to how the state can intervene in the economy in order to solve social problems and improve welfare in conditions of market economy.
On the basis of study of the welfare state, the following models of welfare state have been formed in civilized countries: continental Europe or Christian-democratic (Germany, Austria, Belgium, the Netherlands, Switzerland, France), Anglo-Saxon British or neoliberal (Great Britain, US, Ireland, Canada, Australia, New Zealand), Scandinavian-Nordic or social-democratic (Sweden, Dania, Island, Norway, Finland), Mediterranean or South European (Greece, Spain, Italy) and conservative-corporative (Japan) models.
Of the above-mentioned models, a Scandinavian-Nordic model acquired special attraction. It has become a subject of active considerations since the eighties of the 20th century. Nordic model implies the state actively involved in social sphere, developed pub- lic sector and a society with a sense of high responsibility. There- fore, the “charm” of Nordic model evoked and evokes in people a great benevolence and sympathy. The attractiveness of the Nordic model is expressed in comparatively low level of property inequalities, high rate of social mobility, gender balance, absolute material welfare, etc. The visible example of the Nordic model in the last century was Sweden. Currently, German model of welfare state deserves attention. The economic literature underlines that to a certain degree the success of Germany is a result of active functioning of the economy of public sector. Modern Europe is characterized by the tendency of inclusive growth and rise in prosperity of the state sector.