Optimizing The Efficiency of Social Security Financing Mechanisms in Azerbaijan's Social Protection System

Abstract

The aim of this dissertation is to analyse the current system of social security financing in the Republic of Azerbaijan and to study how far it ensures financial sustainability, fairness and adequate protection for different groups of the population. The research also examines how key stakeholders and available data reflect the strengths and weaknesses of existing mechanisms in terms of revenue structure, dependence on the state budget, benefit levels and coverage of vulnerable groups. This work contributes in a new way by combining international approaches to social protection financing with detailed country-specific evidence for Azerbaijan and by bringing together economic, legal and institutional perspectives in one study. I Chapter “Introduction” explains the importance of social security for Azerbaijan’s socio-economic development, presents the research problem and existing gaps, sets the aim and main research questions, and defines the object and subject of the study as well as the methods used. Chapter II “Analysis of the Financing Structure and Functional Performance of Azerbaijan’s Social Protection System” describes the institutional setup of the pension and social assistance system, examines the main revenue sources and expenditure patterns, and identifies structural inefficiencies and sustainability risks, including demographic ageing, reliance on oil-related revenues and coverage gaps. Chapter III “Strategic Approaches to Optimizing the Efficiency of Social Security Financing in Azerbaijan” develops alternative financing tools and diversification options, discusses the application of result-based budgeting and actuarial planning, and puts forward strategic policy proposals to strengthen long-term financial stability and improve the effectiveness of social protection programmes. Chapter IV “Empirical Assessment and Policy Scenarios for Social Security Financing in Azerbaijan” presents the research design, the dataset and indicators used, the econometric analysis of the relationship between social spending, economic and demographic variables, and evaluates several policy scenarios that show how different reform choices may influence the sustainability and adequacy of the system over time.