Public Goods in Lithuania’s Regions: Human and Social Capital (in Lithuanian language)

2013-12-16
Public Goods in Lithuania’s Regions: Human and Social Capital (in Lithuanian language)

There are a lot of discussions on rural vitality, attractiveness to live and measures to retain rural population, farmers' welfare, and of the nurturing and support of rural values. The attractiveness and viability of territories depend on many factors, i.e., demographic composition of population, employment opportunities, infrastructure availability and accessibility, etc. However, regional economic conditions and social outcomes also depend on the provision of public goods in the area. The definition of public good arose in economics theory. This definition includes such goods and services that are not delivered through the market but which society values and needs. The main characteristics of public goods were identified in 1954 by P. Samuelson: non-rivalry and non-excludability. Non-rivalry means that if the good is consumed by one person, it does not reduce the benefit availability to others. Non-excludability means that if the good is available to one person, others cannot be excluded from enjoying its benefits. The main provider of public goods is the state, and the supply of public goods is usually identified as facilities, parks, reserves, objects of recreation, etc. However, the human and social capital of residents have fundamental characteristics of public goods: they are both non-excludable and non-rival and they provide benefit more than for the owner of this sort of capital. Human capital and social capital are very important categories in economics of state and the well-being of regions. These public goods are acknowledged as very important resources of contemporary society and are much more important than the property of nature or material capital, especially in those countries which are not rich and don’t display many financial or natural resources (e.g. natural gas and other diggings). The main characteristics of human capital are personal features, knowledge, skills, education level and health. Social capital consists of ties, norms, trust, and networks between members of society.

The article analyzes the relationship between the degree of rurality of the territory and human and social capital in 2005-2012. Relying upon the share of inhabitants living in rural areas, we classified 60 Lithuanian municipalities as rural (the share of rural population composes over 60 percent of all inhabitants of municipality: 21 municipalities), semi-rural (the rural population share composes 30-60 percent: 24 municipalities) and urban areas (the share of rural population is 30 percent: 15 municipalities). In regard to foreign and Lithuanian scientific studies, the possibilities to obtain the necessary information from the Lithuanian Department of Statistics, the most suitable indicators were selected which Express the quantitative and qualitative characteristics of human and social capital the best. The indicators of human capital are: the index of natural increase/decrease of population, international migration index, internal migration index, index of ageing, index of self-destructivity behavior, level of education, index of unemployment, and average gross monthly earnings. The indicators for the description of social capital consist of the number of non-government organizations, participation in elections, and the number of communities.

The results showed that most indicators of human capital in rural areas are lower than in semi-urban or urban areas, and during the investigation period were getting even worse compared with urban or semi-urban areas. The bigger the rurality of the territory, the lower the amount of analyzed public goods (human capital). The analysis of tendencies showed that it could not be expected to be better in the future. The indicators of social capital show the better results in rural areas. One of the possible explanations for this could be the stronger demand for closer networking in rural areas. The measures in the 2007-2013 Rural Development Program serve as an incentive which promotes closer cooperation of rural population, unites residents to communities, and stimulates them to act together and solve the main problems.

Keywords: Public goods, Human capital, Social capital, The rurality of the territory.

Pareigienė L., Kuliešis G. 2013. Viešosios gėrybės Lietuvos regionuose: žmogiškasis ir socialinis kapitalas, Ekonomika ir vadyba: aktualijos ir perspektyvos 3(31):68-76 [Index Copernicus].