Last modified: 2017-05-10
Abstract
The research done by O. Hart and B. Holmstrom, the winners of the Nobel Prize in Economic Sciences in 2016, the propositions presented in the theory of contracts, and the suggested methods for dealing with constradictions between remuneration and personal incentives are relevant to Lithuania as well, especially when analysing the consequences of failure to comply with the Social Contract, which have become the most urgent problem in Lithuania in the beginning of the 21st century, i.e. mass emigration of the population.
The society in our country has been struck by the emigration crisis of an unprecedented scope in Europe since World War II. Lithuania also stands out among the EU member states as a state with a particularly low level of trust, whereas the primary institutions of a democratic civil society, i.e. the Government, political parties, and the Parliament, are all at the bottom in the list of institutions ranked according to the level of trust.
Although the growth of the average income and assets of the population was truly impressive over the past 20 years, this did not stop emigration neither slowed it down. This means that merely higher income is not enough for people; in fact, happiness is mostly correlated to equality of income (relative wealth) rather than to increase of income (absolute wealth).
In the framework mentioned above the article provides a comprehensive analysis of the causes of emigration and suggests effective strategic decisions to stop the emigration using strategic thinking and strategic synthesis methods.