A New Welfare Architecture for Economic Solutions A Demand-Side Reform Proposal: Conditional Welfare Anchored by In-Kind Security to Generate Demand

Abstract

This paper repositions welfare policy within a macroeconomic regulation framework, focusing on its policy function under conditions where insufficient demand, weak consumption propensity, and fiscal sustainability constraints coexist. Existing approaches—cash subsidies, consumption vouchers, and unconditional high-welfare schemes—often struggle to simultaneously secure people's basic livelihoods, expand domestic demand, and maintain fiscal stability. In response to this tension, this paper proposes a new welfare architecture in which the state provides basic subsistence guarantees in kind, while linking labor participation, income use, and access to welfare through an institutionalized incentive structure that encourages residents to increase formal employment participation and consumption spending, thereby strengthening aggregate demand and improving the fiscal recoverability of welfare expenditure. The argument proceeds through the sequence of “problem identification—mechanism design—implementation pathway,” further discussing the architecture's potential role in curbing low-activity behavior, stabilizing domestic demand, and easing fiscal pressure, and offers policy recommendations covering pilot rollout, tiered implementation, dynamic evaluation, and public communication. The contribution of this paper lies in attempting to extend the welfare system from a purely redistributive tool into a policy arrangement that combines security provision with macroeconomic regulation, though its actual effectiveness still depends on empirical testing of institutional legitimacy, implementation costs, and behavioral responses

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