Finansijska nejednakost i održivost države blagostanja: svijet i zemlje bivše SFRJ
Financial Inequality and Sustainability of Welfare State: The World and the Countries of the Former SFRY

Author(s): Fikret Čaušević
Subject(s): Economic history
Published by: Институт друштвених наука
Keywords: welfare state; financial inequality; economic sustainability
Summary/Abstract: In the focus of the analysis presented in this text is the question of sustainability of the welfare state concept in the light of the huge changes that have taken place in the global economy and, especially, global financial course in the last three decades. While the final decade of the last millennium was marked with the dominance and proportionately faster economic growth of the world’s most developed economies, the first two decades of the third millennium were characterised by the decrease of the differences in production per capita, and a simultaneous sudden rise when it comes to the differences in the financial resources used to finance economic growth between the world’s most advanced countries and developing countries. An especially pronounced fall in financial efficiency, i.e. a surge in financial expenditures accompanied with a fall in production per unit of spent financial resources has been recorded in the most developed economies of the world. Europe, i.e. the EU countries, and especially its western, the most developed part, as well as France and the countries in the south of the EU, were, together with the US, among the least financially efficient countries of the developed world. Such trends, together with a huge surge of the differences in the global distribution of income, and especially the net income between the wealthiest 10% and the rest of the world’s population, have been directly undermining the financial and economic sustainability of welfare state, implying a thorough redefinition of the tax system and sources of development funding in the world. The problems related to sustainability of welfare state have been multiplied in the countries of former Yugoslavia by huge war losses and destruction in the period of the SFRY dissolution, from 1991 to 2000. These problems have been augmented by an intense stratification of the population, as a consequence of the transition and privatisation, as well as accelerated depopulation of this part of Europe. Excessively growing financial inefficiency in the majority of developed countries, as well as in some of the fastest growing large economies in development, would imply huge political pressure that may have far-reaching consequences on the global stability.

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