Asset-Building Policy for Children in Azerbaijan: Design Elements of Child Development Accounts

Background: For the last decade, Azerbaijan has been making progress in improving the well-being of children, who constitute 30% of the population. To continue this progress, the country is searching for innovative, progressive and evidence-based social policy measures. Since 2017, policymakers have discussed integrating asset-building policies for children into the social-protection system. Evidence demonstrates that Child Development Account (CDA) policies, and similar asset-building initiatives for children, contribute to improved well-being for children and for their families: CDAs improve parental expectations about children's college attendance and the social-emotional development of children. They also lower depressive symptoms among parents, increase the number of college-specific savings accounts, and increase positive parenting.

Methods: Needs-assessment and developmental-evaluation methods were used to identify needs, explore local conditions, and assess potential resources for designing a CDA policy for Azerbaijan. Information was collected through meetings in Azerbaijan in 2019 and 2023 with key informants such as ministers, deputy-ministers, members of the national parliament, heads and deputy-heads of departments in ministries, in national oil fund, and assistants to the nation’s president. Interviews were also conducted with university presidents and vice presidents, as well as representatives from the World Bank, UNICEF, and local NGOs. The study conducted a desk review of current social policies, laws, and services for children and families in Azerbaijan.

Results: The study found gender-based violence against all children and unequal access to postsecondary education of children from low-income families were current major child issues in Azerbaijan. The study also found a wide acceptance and willingness of the idea of universal CDA policy by senior policy makers in Azerbaijan. The study discovered that existing funds, such as financial allowances for children, can be geared to serve as seed funding for CDAs and natural resource wealth can be used as a potential fund for matching. The study also revealed a strong public institutional base for administering and managing of CDAs. The study also found concerns about the lack of reliable private banks, wealth-management agencies, and investment organizations for delivering CDAs.

Conclusions and Implications: These findings suggest a universal and progressive CDA policy design for Azerbaijan. By considering gender-based violence against all children and unequal access of low-income children to postsecondary education, the CDA policy for Azerbaijan can be designed to target and tackle those issues. Findings about weak financial and wealth-management system in Azerbaijan imply that CDAs in such countries should be a passive social-policy measure managed by government agencies. By developing and implementing the CDA policy, Azerbaijan will not only improve the well-being and development of all children but also will advance several of the United Nations Sustainable Development Goals: “No Poverty” (Goal 1), “Quality Education” (Goal 4), “Gender Equality” (Goal 5), and “Reduced Inequalities” (Goal 10).