THE SOCIAL STATE AND ITS ROLE IN THE FORMATION OF AN INCLUSIVE ECONOMY

Introduction and Purpose: The ongoing socio-economic changes in society have made it inevitable to improve people’s living conditions. Economic growth is a stable process during which the productive capacities of the economy increase over time, leading to the quantitative expansion of national output and income. The social state is a fundamental component of a democratic system, grounded in the principles of freedom, equality, solidarity, and social justice. It is primarily oriented toward reducing poverty and economic vulnerability, recognizing that unregulated markets may generate significant inequalities in wealth and opportunities. The concept of the social state has long held a central place in ensuring social justice and economic stability. In this paper, the concept of inclusive economy is examined as a model of economic development that, alongside achieving economic growth, ensures that the benefits derived from such growth are distributed widely, fairly, and equitably. The study emphasizes that economic growth alone does not guarantee social well-being, and that inclusive economic development requires active state involvement in improving education, healthcare, employment, social protection, and regional development policies. The present article analyzes the approaches of Georgia, as well as European countries and the United States, toward the social state and inclusive economy. It explores the historical formation, essence, objectives, and contemporary relevance of both concepts. The aim of this article is to define the concept and essence of the social state; to examine the significance and outcomes of inclusive economic development; and to establish the unconditional link between the principle of the social state and the formation of an inclusive economy. The relevance of the chosen topic lies in the fact that the social state is one of the core components of a democratic order, whose purpose is public welfare and the reduction of poverty. Inclusive economic growth is impossible without the state’s social policy, as only the social state provides the foundation for economic inclusiveness. The article also highlights viewpoints and recommendations to ensure that the social state and inclusive economic development do not lose their original purpose and are not replaced by irrelevant or distorted values. Research Methodology: In the preparation of this research, the comparative-legal, analytical, synthetic, and contextual-legal methods were employed. The study draws upon both Georgian-language and foreign-language scholarly works. The article incorporates the results of both doctrinal and non-doctrinal research, which reveal not only the normative but also the social impact of the formation of the social state and the inclusive economy. Results and implications: The formation of an inclusive economy is not a short-term objective. First and foremost, for an economy to develop sustainably and inclusively, there must be constitutional guarantees and a willingness on the part of the government to ensure equal conditions for all members of society. Both the social state and the model of an inclusive economy are based on identical values, where the starting point is the participation of every member of society, the creation of a minimum standard of living, and the provision of essential social conditions. However, a key consideration is that neither the state nor its social policy can transform the existing reality without the active involvement of society itself. It has been revealed that the social state seeks, to some extent, to make the boundaries of social stratification conditional and permeable. Eliminating inequality and social injustice is the goal of every democratic, legal, and social state. As a practical implication, strengthening the social state within a country’s development strategy cannot be regarded merely as social policy; it constitutes the foundation for economic modernization, democratic stability, social equality, and overall national progress. Conclusion: In the modern era, under conditions of globalization, industrialization, and rapid technological progress, the role of the social state has become even more significant. The expansion of economic opportunities is accompanied by new challenges - rising inequality, social polarization, poverty, and constraints stemming from individuals’ socio-economic status. In such circumstances, market self-regulation alone is insufficient. A strong, targeted, and strategic state policy is essential to support vulnerable groups, develop human capital, ensure access to basic services, and promote broad participation in economic processes. The goal of an inclusive economy lies not only in achieving economic growth but also in ensuring the fair and equitable distribution of the benefits derived from that growth. Its primary purpose is to guarantee that the outcomes of economic progress are enjoyed not just by specific groups, but by all segments of society - women, youth, ethnic minorities, residents of peripheral regions, the elderly, and migrants. In conclusion, the social state and the inclusive economy form an interconnected chain. Without the social state, inclusive economy remains merely formal; without inclusive economy, the objectives of the social state cannot transform into tangible progress.