"In the ?rst decade of transition, the Georgian social protection system experienced a major retrenchment as the government struggled to ?nance welfare provision in the face of massive economic contraction and the near collapse of public institutions. Since 2004, this trend has been reversed, with the economy returning to a fast growth path and public administration improving considerably. Recent reforms, including the notable introduction of universal public health insurance, are welcome steps towards building a modern welfare state. Major challenges still remain, however, especially in relation to the system's limited effect on widespread poverty. Decelerating growth, the lack of strong pro-welfare actors, and the absence of positive external pull factors may stall or prevent future growth, but the changing nature of the social contract between the people and government , as well as Georgian politicians' growing recognition of the importance of the welfare system for inclusive growth, leaves ample space for optimism."

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