Part 2. THE INTERDISCIPLINARY APPROACH TO RESEARCH BASICS THE LIFE QUALITY IN TURBULENT CONDITIONS
2.1. The impact of inclusive approaches to economic development on the quality of society in European countries
Part 2. THE INTERDISCIPLINARY APPROACH TO RESEARCH BASICS
In the aftermath of the global economic crisis, trust among Europeans in society and its institutions declined, causing concerns about economic and social insecurity, perceived inequalities, societal tensions and lack of fairness [9].
According to Eurostat data on the living conditions in Europe, in 2021 95.4 million people in the EU, representing 21.7% of the population, were at risk of poverty or social exclusion. Among the 95.4 million people in the EU that faced the risk of poverty or social exclusion, some 5.9 million (1.3% of the total population) lived in households experiencing all three poverty and social exclusion risks simultaneously. In 2021, 73.7 million people in the EU were at risk of poverty, while 27.0 million were severely materially and socially deprived, and 29.3 million lived in a household with low work intensity. The risk of poverty or social exclusion varied across the EU Member States. The highest shares of people at risk of poverty or social exclusion were recorded in Romania (34%), Bulgaria (32%), Greece and Spain (both 28%). In contrast, the lowest shares of people at risk of poverty or social exclusion were recorded in Czechia (11%), Slovenia (13%) and Finland (14%). This can be seen in more detail in Figure 1 [8].
Fig. 1. People at risk of poverty or social exclusion in the EU Member States [8]
21.6 20.3 33.6 11.5 16.8 20.4 22.8 20.1 27.4 27.0 19.3 20.5 24.9 17.6 25.1 24.5 19.9 19.4 19.9 16.0 16.7 17.0 20.0 35.6 14.3 13.8 15.9 17.7 0 16.3 18.421.7 18.8 31.7 10.7 17.3 20.7 22.2 20.0 28.3 27.8 19.3 20.9 25.2 17.3 26.1 23.4 21.1 19.4 20.3 16.6 17.3 16.8 22.4 34.4 13.2 15.6 14.2 17.2 0 0 0
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European Union - 27… Belgium Bulgaria Czechia Denmark Germany (until 1990) Estonia Ireland Greece Spain France Croatia Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden Iceland Norway Switzerland
2020 2021
The concepts of quality of society and quality of life are closely related.
The concept of the quality of life is based on ideas about well-being and a just world, which are components of the ideologies of liberalism and democratic socialism.
The quality of a person's life is considered the highest value in the social state and represents a set of factors that provide a person with both material and emotional well-being. Its basis is the satisfaction of various human needs, in particular:
economic protection, improvement of working conditions, development of the social security system, public transport, health care, professional training, communal services, etc. Both economic and non-economic aspects of life are used to assess human well-being, including: physical health, family, education, employment, wealth, security, freedom, religious beliefs, and the environment.
The quality of society has a great influence on well-being and quality of life.
It is associated with a sense of economic and social security/insecurity, perceived inequality, social tension and justice. Also important issues of the quality of society are the problems of property, distribution and redistribution of national income, the structure of social needs of society and ways of meeting them.
For a long time, the approach in which economic growth was considered the most important factor prevailed in scientific discussions. Over time, it became obvious that economic growth is not enough to improve the welfare of the population. In recent decades, more and more emphasis has begun to shift towards intangible dimensions of quality of life. An approach is gradually being carved out, according to which the needs and challenges of modern development determine and shape social, economic, political and environmental factors in the specific context of the country and localities. More details about this are disclosed in the study [14].
Inclusive approaches to socio-economic development, which are oriented towards the policy of equal opportunities based on poverty reduction, justice, human rights, development of human and social capital, gender development and social protection, have been spreading. Inclusive development is a logical evolutionary stage of the search for models of better social development, society's response
to global challenges and a corrective concept of sustainable development. It became a logical continuation of the search for better models of social development, and arose as a continuation of the ideas of concepts: basic needs, social welfare, human development, human and social capital [14].
An inclusive society is a society that provides equal opportunities regardless of origin and does not differentiate people based on race, gender, class, age and geography. Such concepts as “social cohesion”, “social integration” and “social capital” are associated with an inclusive society [3, p. 3].
In recent years, intangible factors related to the quality of a person's life, including life expectancy, state of health, and level of education, have become increasingly important. This is evidenced by the shift in emphasis from comparing the socio-economic development of states by GDP level to the Inclusive Development Index, which includes more components that measure intangible aspects and the quality of life of the population, the indicators of which can differ significantly from the indicators of economic growth.
The European Union has a consistent policy of implementing an innovative model of economic development. Its result is that 9 out of 10 states with the highest rating of the Inclusive Development Index (IDI) in 2018 are EU members. Thus, the best inclusive development is demonstrated by Norway (1st place), followed by Iceland (2), Luxembourg (3), Switzerland (4), Denmark (5), Germany (12).
In the ranking of developing countries, six European countries are in the top 10:
Lithuania (1), Hungary (2), Latvia (4), Poland (5), Croatia (7) and Romania (10).
Among the 74 states of this group, Ukraine took 49th place in 2018, which indicates a rather low level of inclusive development in the state [13].
UNCTAD’s new Inclusive Growth Index shows countries’ performance across four pillars: economy, living conditions, equality and environment (Figure 2). This Index underlines the insufficiency of economic growth as the sole measure of progress. The Inclusive Growth Index (IGI) analyzes countries’ ability to achieve such growth, with a focus on gender equality and environmental sustainability, to achieve more comprehensive and balanced indicators aimed at closing persistent
gaps within and between countries and addressing acute inequalities of opportunity and outcomes [6].
Fig. 2. The 4 pillars of Inclusive Growth Index (IGI) [6]
It is important that economic growth is conditioned by the effectiveness of economic and social institutions and their type [1]. As the economy recovers, trust in institutions also being restored. However, improving the social structure and engaging citizens remain important both for individual quality of life and for the sustainability of society as a whole. The quality of institutions is a key factor in achieving upward economic and social convergence in the EU [9].
When it comes to inclusive development or inclusive approaches, it is necessary to understand that this happens with the support of certain institutions, primarily with the help of the state on the basis of public management mechanisms, public, private and public institutions.
Inclusive development assumes the ability of economic, political and social systems to provide conditions for well-being on a stable, long-term basis [7].
It depends on inclusion of excluded people and use of their opportunities. Therefore, social institutions are important, how they change, and how they exclude and include people in social relations and interaction [2; 12].
Therefore, a developed social and institutional environment is necessary to ensure the quality of society. Socio-economic transformations in the countries of Central and Eastern Europe in the last two decades have radically changed the social structure and institutions.
According to the latest research by the Eurofound [5], the quality of institutions is a key factor in achieving upward economic and social convergence in the EU, playing a fundamental role in growing the economy, attracting foreign investment, ensuring the implementation of policies and reforms. The main points are as follows:
High-quality institutional performance is associated with higher gross domestic product (GDP) per capita, higher employment rates and higher trust in national government. It is also associated with lower risk of poverty and social exclusion, highlighting how high-performing institutions are essential to lasting economic and social convergence in the EU.
Although the EU27 Member States are leaders in institutional quality globally according to the six Worldwide Governance Indicators (WGIs), their performance deteriorated on all the indicators after the 2008 crisis. This trend is particularly worrying given the important role of institutions in strengthening the resilience of societies.
The Nordic and western European Member States emerge as the best performers on institutional quality in Europe over 1996-2020, while the performance of the Baltic states has improved remarkably since joining the EU, overtaking the Mediterranean Member States, whose scores have declined in the past 12 years.
The performance of the central and eastern European Member States has been stable;
however, despite some improvements, Bulgaria and Romania had the poorest institutional quality over the period.
An inclusive approach has a long-term perspective, as the main focus is on productive employment as a means of reducing social stratification by income level and raising the standard of living of the less well-off sections of the population.
EU Cohesion Policy supports the social inclusion of people with disabilities, younger and older workers, low-skilled workers, migrants and ethnic minorities such as the Roma, people who live in deprived areas, and women in the labour market.
In particular, it aims to lift at least 20 million people out of the risk of poverty. Social inclusion was one of the eleven priorities for Cohesion Policy in 2014-2020 (“thematic objective 9”). Until 2020, there was a program “Europe 2020: A Strategy
for Smart, Sustainable and Inclusive Growth” aimed at employment, innovation, education, social inclusion and climate/energy. Each Member State adopted its own national targets in each of these areas [10].
The European Pillar of Social Rights is the overall guiding framework to ensure fairness in the EU; its full implementation is crucial to achieving upward social and economic convergence. The European Pillar of Social Rights sets out 20 principles and rights to make the European Union more inclusive and fairer and to improve the lives of all European citizens. These principles to support fair and well-functioning labour markets, structured around three chapters (Figure 3) [4; 11].
Fig. 3. Three chapters of the European Pillar of Social Rights [4]
Currently, a new initiative is operating in the EU, this is the Recovery and Resilience Facility (RRPs). The RRPs is the key instrument at the heart of NextGenerationEU to help the EU emerge stronger and more resilient from the current crisis. This temporary recovery instrument allows to raise funds to help Member States implement reforms and investments that are in line with the EU’s priorities and that address the challenges identified in country-specific recommendations under the European Semester framework of economic and social policy coordination. It makes available €723.8 billion (in current prices) in loans (€385.8 billion) and grants (€338 billion) for that purpose [11].
The RRF Regulation sets out six policy areas of European relevance structured in six pillars (Figure 4). The Recovery and Resilience Scoreboard displays the impact of the RRF on these six policy pillars:
• Green transition
• Digital transformation
• Smart, sustainable and inclusive growth, including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong SMEs
• Social & territorial cohesion
• Health, and economic, social and institutional resilience with the aim of, inter alia, increasing crisis preparedness and crisis response capacity
• Policies for the next generation, children and the youth, such as education and skills [11].
•
Fig. 4. Share of RRF funds contributing to each policy pillar [11]
Each measure contributes towards two of the six policy pillars, therefore the total contribution to all pillars displayed on this chart amounts to 200%
of the RRF funds allocated to Member States.
The RRPs include a wide range of reforms and investments that will contribute to support a broader participation in the labour market, productivity gains through education, reskilling and upskilling measures, as well as social inclusion and
0.00 10.00 20.00 30.00 40.00 50.00 60.00
Green transition Digital transformation
Smart, sustainable and inclusive
growth
Social and territorial cohesion
Health, and economic, social
and institutional resilience
Policies for the next generation
resilience. Together with cohesion policy funds and the Just Transition Mechanism, the RRF is supporting a fair and inclusive recovery in the EU in line with the European Pillar of Social Rights. The Commission’s Action Plan to further implement the Pillar proposed new EU headline targets on employment, skills and poverty reduction. Based on these, relevant recommendations for specific countries were developed. These include the importance of ensuring access to quality education at all levels, as well as adequate coverage by social safety nets and short-time work schemes. In particular, with an emphasis on some regions, sectors and population groups that were already facing worse employment and social conditions, notably:
the youth, low-skilled and temporary workers, persons with disabilities, people with a migrant background and the Roma [11].
In the graph below (Figure 5), we can see the breakdown of expenditure supporting smart, sustainable and inclusive growth per policy area, including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong SMEs.
Fig. 5. Breakdown of expenditure supporting smart, sustainable and inclusive growth per policy area [11]
0% 5% 10% 15% 20% 25%
Building renovation and construction Support to SMEs Research, Development and Innovation Competitiveness Business environment/ Entrepreneurship Industrialisation and reindustrialisation Business infrastructure Cultural sector Regulatory changes for smart, sustainable and inclusive…
Support to large enterprises Transnational cooperation
EU Member States will use RRF funds to implement ambitious reforms and investments to make their economies more resilient and competitive and enable a sustainable recovery. The RRF supports measures to promote smart, sustainable and inclusive growth, entrepreneurship, competitiveness, industrialisation and reindustrialisation, renovate buildings, improve the business environment, foster research, development and innovation, and support SMEs [11].
Conclusions. The conducted research allows us to draw conclusions about the impact of inclusive approaches to economic development on the quality of society in European countries.
Firstly, inclusiveness ensures certain rates of economic growth, which should reduce inequality and poverty. Inclusive development involves an emphasis on the distribution of social and material benefits among different population groups, as well as influence on structural factors in order to reduce manifestations of exclusivity and marginalization of vulnerable groups of society. In general, when average indicators in income and non-income dimensions of well-being and inequality improve, we can talk about inclusive development, which is aimed at raising the standard of living and more evenly distributing the benefits of increased well-being among different population groups.
Secondly, it is necessary to note the importance of the social and institutional environment and the high attention paid to this issue by the EU countries when forming and implementing the relevant policy. Participation in society plays an important role in combating social exclusion. EU policies acknowledge the importance of citizen engagement for both the quality of society in European counters and the European project itself.
Third, the direction of inclusiveness involves the direction of poverty reduction, creation of new jobs, improvement of the environment, satisfaction of human needs, development of education and health care, and creation of conditions for future generations. EU policy is aimed at creating a sustainable, smart, inclusive society based on green and digital transformation in the coming years.
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2.2. Using the tools of the concept of sustainable development to maintain