THE ROLE OF INSTITUTIONAL INVESTORS, THE PRIVATE SECTOR, AND INNOVATIVE FINANCIAL INSTRUMENTS IN SOCIAL PROTECTION FINANCING

Abstract

This study examines the role of institutional investors, private-sector resources, and innovative financial instruments in strengthening the financial sustainability of social protection systems, with particular attention to the diversification of financing sources and the mobilization of long-term capital. The research analyzes the theoretical foundations and institutional mechanisms of social protection financing by considering the interaction of public budgets, social insurance contributions, institutional investors, private companies, and market-based financial instruments, while selected global indicators are used to assess existing financing and coverage gaps. The findings demonstrate that social impact bonds, blended finance, social and sustainability bonds, impact investment funds, public–private partnerships, and insurance-based mechanisms can complement traditional public financing by distributing financial risks, attracting additional private capital, and linking financial resources with measurable social outcomes. The study proposes an integrated institutional–financial approach based on resource mobilization, targeted allocation, risk sharing, impact assessment, monitoring, and reinvestment, which can contribute to broader social protection coverage, more efficient use of financial resources, and greater long-term resilience of social protection systems.