There is a phrase that never fails to win applause from any podium: "a monthly allowance for every child." Arguing against it feels just as awkward as arguing against a wish for good health. Behind it lies a seductive image of a state that does not divide children into its own and others. The only trouble is that this image comes with an exact price tag, and it can be calculated down to the very last manat.
The math looks like this. There are over 2.7 million children under the age of 18 living in the country. Assign each of them at least 100 manats per month - a sum that the authors of the idea themselves admit is modest - and annual expenditures will reach approximately 3.3 billion manats. Worldwide, social programs are calculated not for a year, but for a decade, and on a ten-year horizon, we are already talking about more than thirty billion. The revenues of the state budget of Azerbaijan in 2024 amounted to 37.16 billion manats. It turns out that a single allowance, distributed universally, would consume almost every tenth manat of the treasury - annually, indefinitely, regardless of any external economic conditions.
Every honest conversation about social policy begins with this figure. Everything else - demography, fairness, caring for tomorrow - is secondary to the question that lovers of beautiful slogans bypass: at whose expense? The state, which in 2006 abandoned the Soviet model of universal payments and built a targeted system in its place, answered this question long ago. It answered soberly. And, as world experience shows, it answered correctly.
One Figure That Leaves Almost Nothing to Argue About
The budget is not elastic, and every manat in it already has a purpose. To fit a new 3.3 billion into the expenditure side, it must either be taken away from other budget lines - education, healthcare, infrastructure, defense - or the debt must be increased, or the oil fund must be tapped into more deeply. A third way does not exist, and anyone who promises to "find the funds" without specifying the source is not engaging in economics, but in a disappearing rabbit magic trick.
The scale becomes tangible when compared. More than three billion manats is the budget of an entire mid-sized ministry; it is a sum comparable to major national healthcare programs. Redirecting it to unconditional payments would mean withdrawing money from the construction of hospitals, procurement of equipment, and training of doctors and teachers - meaning the very services that these same children will use throughout their lives. A trap emerges: to hand a child one hundred manats in cash today, one would have to undersupply them with a clinic, a school, and a safe road tomorrow.
The most treacherous feature of a universal allowance is its irreversibility. A one-time payment can be adjusted, a subsidy can be wound down, a benefit can be revised. A monthly allowance for every child instantly turns into a social contract that is politically impossible to break. Any government that dared to cut it would be crucified on air for "taking money from children." The state would thus voluntarily shoulder an obligation that cannot be removed without paying a heavy price - and would do so blindly, without knowing what will happen to its revenues in ten or twenty years. A mature government does not set such traps for itself. Baku did not set them.
The Oil Trap: Generosity at the Peak of the Cycle Is the Most Dangerous Generosity
Here we come to what distinguishes the Azerbaijani case from abstract discussions about social justice. The country's budget relies heavily on hydrocarbons. According to forecasts for 2024, the oil and gas sector provided just over half of budget revenues. By the end of September 2025, the State Oil Fund had transferred a cumulative total of about 167 billion manats to the budget. Behind these prosperous figures lies a structural feature of a commodity-based economy: a significant part of the treasury is fueled by a source whose price is determined not in Baku, but on global commodity exchanges, depending on how quickly the world switches to electric vehicles.
Financing an indefinite social obligation from revenue that fluctuates along with the price of a barrel is roughly equivalent to taking out a thirty-year mortgage while having a seasonal income. As long as market conditions are high, everything looks stable. Should prices drop, the state would find itself squeezed between two equally painful choices: cutting "child money," drawing the wrath of the streets, or cutting everything else, dooming schools and hospitals to degradation. It is precisely from such a dilemma that Baku protected itself by not turning current commodity revenues into an eternal handout.
The logic here is exactly the same as that embedded in the very philosophy of the Oil Fund: windfall revenues are accumulated and saved for future generations, rather than consumed today. Norway, whose fund served as one of the models, does the same - it saves, rather than distributes. Economists call the opposite model the "resource curse": when easy commodity money corrupts budget discipline and drives handouts that cannot be sustained after the commodity depreciates. A universal child allowance would be an almost clinical case of such a curse - pleasant at the peak of the cycle and destructive at its bottom. A state that thinks generations ahead does not fall for this bait.
Money That Is Guaranteed to Go to the Wrong Place
Suppose for a second that the money was found after all. Even in this fantastic scenario, a universal allowance would remain a bad idea - for a reason clearest formulated by Milton Friedman, a man who cannot be suspected of a dislike for direct cash payments to the poor. Friedman advocated for cash instead of cumbersome bureaucracy his entire life, but he set a strict condition: assistance must go to those who need it, not to everyone indiscriminately. He proposed replacing a colorful assortment of scattered programs with a single system of cash support that guarantees a minimum income to all those in need - regardless of the reasons for their need. The key word here is "in need." Not "everyone." Precisely those in need.
Universality means that the treasury pays both a family that does not know how to feed their child and a family choosing between two expensive private schools. One hundred manats for the first is a month of peace of mind. For the second, it is a sum unnoticed on a restaurant bill. Let us recall the actual structure of income: with an average salary of around 928 manats, the median, meaning the typical salary, is about 459 manats. The gap between the average and the median is the measure of inequality, and it explains exactly why a universal payment misses the target. The very same hundred manats transforms life at the bottom of the pyramid and vanishes without a trace at its top.
Social policy specialists call this "leakage": the wider the net, the larger the share of the catch goes to those who do not need it at all. Budget arithmetic is merciless. A sum spread thinly across 2.7 million children does not cure poverty; the same sum concentrated on the most vulnerable does. With a fixed budget, these scenarios are mutually exclusive, and every manat given to a wealthy family "for the sake of the principle of equality" is a manat taken away from a family for whom it was the last reliance. Equality on paper turns into inequality in life.
This is precisely why the Azerbaijani model is designed the way it is. One-time "milk" money at birth, raised from 300 to 500 manats; monthly payments to children with disabilities, those who have lost a breadwinner, children from low-income families, and children of martyrs and military personnel; support for mothers with multiple children. This assistance covers over 600,000 people and costs about 650 million manats a year. The system is built on the only correct principle: money follows need, not the fact of birth. This is not a refusal to care - it is targeted care that reaches those who are truly struggling, instead of scattering blindly across everyone.
The Precedent They Prefer to Keep Quiet About
Proponents of universal payments like to repeat that "in the entire civilized world, everyone is paid for their children." The reality is exactly the opposite: for the past two decades, the world has been methodically moving away from unconditional payments toward targeted ones. This is not a whim of individual governments, but the consolidated position of institutions that set the tone in developing economies.
The International Monetary Fund, in its programs, consistently advocates for more precise targeting of assistance to the poor rather than universal schemes. The IMF and the World Bank push low- and middle-income countries toward programs for "the most in need," considering universal schemes unaffordably expensive for all but the wealthiest nations. One can view this philosophy differently, but it is impossible to pass off a universal allowance as the global mainstream. The mainstream consists of the exact opposite - and Azerbaijani policy moves in step with it, not against it.
The most eloquent precedent is Mongolia, a country strikingly similar to Azerbaijan in its economic structure: resource-dependent, post-Soviet, with volatile revenues. The IMF insisted that the Mongolian government wind down its universal child allowance program, which covered all families with children. The motive was stated directly: an indefinite universal payment is incompatible with the sustainability of a resource-based budget. The lesson of Ulaanbaatar is much wiser to learn from afar than to repeat on one's own skin - and Baku learned this lesson in advance.
Wealthy countries are moving in the same direction, just from the other end. The United Kingdom, the birthplace of the classic universal child benefit, introduced a mechanism in 2013 to claw it back from high-earning parents - the same targeting, just with the opposite sign: not "giving to the poor," but "stopping giving to the rich." The vector is the same everywhere - from universality to targeting, from a gesture to a calculation. Azerbaijan has taken a sober and modern position on this trajectory.
The Demographic Argument That Crumbles Under Scrutiny
When the economics of a universal allowance begin to crack, the final trump card is played: "this is necessary for demographics, for birth rates, for future soldiers and mothers". It sounds patriotic and almost bulletproof. Upon the very first check against the facts, the argument crumbles.
Let us start with the diagnosis. There is no demographic collapse in the country. The total fertility rate in 2024 was about 1.98, and in 2025, it was around 1.96. This is close to the replacement level and incomparable to genuine catastrophes like South Korea's, where the figure fell below one. The relevant ministry directly stated several years ago that there was no need to artificially stimulate the birth rate, as no acute demographic problem was observed. Time has confirmed this assessment. Treating an illness that does not exist with an expensive medicine is not caring for the nation - it is scattering its strength.
Now about the effectiveness of the medicine itself. Global science has studied financial incentives for birth rates inside and out, and the conclusion is sobering. A systematic review shows that the effect of cash payments on birth rates is usually temporary, whereas expanding access to kindergartens has a significantly more sustainable impact on it. In simple terms: a one-time bonus for a child produces a short spike - families merely shift births they were already planning to a slightly earlier time - while barely moving the long-term curve. A Korean study based on a massive dataset estimated that without multi-year payments, the birth rate would have been lower by only a few percent. A modest return for colossal expenditures.
Hence the conclusion, which is inconvenient for proponents of handouts. It is more reasonable to support families not with an anonymous check, but with infrastructure: nurseries, kindergartens, affordable pediatrics, and full-day schools. This is exactly what allows a mother to combine motherhood and work, and this is exactly what, according to research, sustains birth rates better than any bonuses. A state that chooses investments in institutions over universal handouts chooses what works, rather than what sounds beautiful.
There is also a more subtle aspect that is rarely discussed. The country maintains a skewed sex ratio at birth - about 114 boys per 100 girls - and the UN links selective practices to the economic conditions of families and a cultural preference for sons. A universal allowance for every child does not cure this problem, and in the worst-case scenario, it is capable of reinforcing it. Money is neutral toward values; institutions, services, and education are not. The demographics and health of the nation are lifted by the latter, not the former.
An Honest Counterargument - and Why It Only Strengthens Baku's Position
A serious analysis must include the strongest argument of the opponents, otherwise it is not an analysis but a propaganda leaflet. Such an argument exists, and it was formulated by Amartya Sen, a Nobel laureate who dedicated a separate work to targeting. Sen warned about the downside of targeting: programs designed only for the poor run the risk of degenerating. The narrower the circle of recipients, the weaker the political coalition in their defense, and the easier it is to cut payments at the first deficit. Hence his famous thought: benefits intended exclusively for the poor too often become "poor benefits".
Added to this is the technical misfortune of targeted systems - selection errors. Complex means-testing sometimes cuts off a portion of the truly poor: those who got confused in the paperwork, did not reach the official, or backed down in front of the stigma. The argument is heavy, and it cannot be brushed aside.
However, it hits completely away from where the apologists for universal handouts are aiming. Sen's critique does not imply "paying everyone indiscriminately". It implies something else: the targeted system must be made high-quality - generous enough for society to value it, simple enough for every person in need to reach it, and stable enough so that it is not cut at the first dip in commodity prices. This is precisely the trajectory along which the Azerbaijani model is moving: expanding coverage, increasing amounts, digitalizing procedures, and reducing paperwork barriers. The answer to "imperfect targeting" is "perfect targeting", and not capitulation to an expensive gesture that does not cure any of the named illnesses and, moreover, undermines the treasury.
Not Paying Everyone Means Finally Paying Those in Need
Let us bring the threads together. The idea of a universal child allowance fails all four tests required of a responsible policy. The affordability test: it costs almost a tenth of the budget and relies on revenue that could drop tomorrow. The fairness test: it gives money to the well-off at the expense of those who are truly struggling. The effectiveness test: as a demographic tool, it provides a temporary and expensive effect where services work more reliably. The honesty test: it masks a political gesture as care, which is then impossible to revoke.
The choice made in Baku withstands all four tests at once. Having abandoned Soviet egalitarianism in 2006 and built a targeted system, the state preferred difficult responsibility over easy populism. The course that grew out of this consists of three pillars. Strong and generous targeted support for those who need it - instead of a symbolic layer for everyone. Tax relief linked to the number of children - an instrument that helps working parents without turning into an eternal budget burden. Investments in services - nurseries, kindergartens, pediatrics, and full-day schools - which lift both the quality of life of children and the birth rate more reliably than any one-time payments. Expensive? Yes. But these are expenses with a return, not a habit of the treasury to live beyond its means.
It is tempting to measure policy by the kindness of its slogans. Mature policy is measured by consequences. Promising every child an envelope with money is easy and pleasant; keeping this promise for decades, on fluctuating oil, without collapsing schools and hospitals, is impossible. A state that refuses to pay everyone in order to truly pay those in need looks less spectacular on the podium and turns out to be far more responsible in the destiny of a specific child. The difference between these two types of generosity is the difference between populism and statesmanship. Baku chose the second - and time proves its righteousness over and over again