Optimal Fiscal Policy – Factors for the Formation of the Optimal Economic and Social Models

Abstract

Objective - The purpose of this paper is to develop the optimal economic and social model for the modern stage and analyze the Social Progress Index in Georgia. The research is based on the paradigm that "what we analyze, this determines the decisions we make". Consequently, emphasis is placed on issues that significantly affect human well-being. Methodology/Technique - In this top-down study, the empirical material is collected from official documents and public statements made by centrally placed politicians and administrators in Georgia as well as research conducted by international organizations in Georgia. The research database used is the legislative and normative acts adopted by the government of Georgia in the modern day, in particular: the National Statistics Office of Georgia, the Economic Development and Finance Ministries, the Georgian National Statistics Office, the Parliamentary Finance and Budget Committee and other related departments. Findings - This study shows that the formation of the optimal economic and social organization model of a country is particularly dependent on the selection and implementation of the most appropriate fiscal policy. The philosophy of social security is one of the greatest achievements of modern civilization. The present work is dedicated to the progress of human development – specifically, welfare issues. This provides the model for creating the optimal social security system of a population, with the following social system parameters: distribution of national income to the population and their families and addressing the issues of financing social security needs. Based on the study of the social experiences of social reform and the social indicators of the European Union, the alternate concept of prosperity and perfection is developed. These topics are the focus of the present work. Novelty - The empirical material contained within focuses on the period after 2005, when some important changes in political leadership took place. In 2003, Saakashvili became President of Georgia, Ivanishvili was elected as Prime Minister in 2012 and Kvirikashvili took over this position in 2015. During this time, there was also a shift in government social policy at a central level. The collection of empirical data for this study ends in 2017, giving a total study period of 12 years. Type of Paper: Empirical. Keywords: Fiscal Policy; Welfare; Social Security; Social Innovation; Household; Employment. JEL Classification: E24, E62, H31, H55, H61, R2, R51.