Reforming social security in a transition economy: The comparative case of Lithuania, Latvia and Estonia

Abstract

While the structure and purposes of the present social security systems in the Baltic States do not differ from those of the
OECD countries in general terms, certain specific features can be identified. There are similarities between the Baitic States and
other Central and Eastern European countries that had experienced a transition from a command system to a market economy. All of them went through massive privatization, with high inflation and unemployment, creating a sense of declining welfare (Eatwell,
2000, Ferge, 2001). Although the scope and depth of the problems have varied, all of these countries managed to stabilize
their economies and are currently experiencing fast growth In GDP. The Baltic economies have the fastest growing OOP's in
Europe, with Estonia the current leader (Eurostat, 2006) and were well placed to join the EU and NATO in 2004. Nevertheless, In
terms of some social Indicators, the Baitic States lag behind the developed democracies (UNDP, 2005).
The purpose of this paper is to examine the social security systems of the three Baltic States as an example of Eastern Euro
pean welfare state development, with a view to make some remarks on the systems' efficiency. A brief overview of the compo
nents, goals and objectives of the national social security systems occupies an important place in the analysis. l\Aethodologicalty,
the analysis is based on the modelling of social policy and its extrapolation under the Baltic States' conditions using factual ma
terial and statistics. The welfare regimes typology by Esping Andersen, Ferrera and Barr (Esping-Andersen, 1990; Ferrera, 1996;
Barr, 1993) forms a basis, with certain qualifications, for the classification of the Baltic States' social security systems and the as
sessment of future lines of development. Studies by the Estonian,
Latvian and Lithuanian researchers Leppik, Bite, Lazutka and Medaiskis (Bite, 2003; Lazutka, 2001; Leppik, 2003; Medaiskis, 1998)
as well as papers published by the authors of this article (Guogis, Bernotas, Oselis, 2000; Bernotas, Guogis, 2003} designed for
the discussion of the national social security issues contribute to the analytical discourse on social security in the Baltic States.
The paper consists of three parts. The first part contains a definition of the concept, structure and goals of the national social security systems on the general background of social policy modelling. The second part provides an analysis and assessment
of the systems and an examination of protection against various social risks. The third part identifies the key factors that have in
fluenced the formation and prospects of the present social security systems.