Brel, Yuliya2020-10-302020-10-302017-03Journal of Public Administration 2017, Vol. 52(1), pp. 52-63.https://udspace.udel.edu/handle/19716/27905The institutional structure of the public sector in the Republic of Belarus is rather complex, with the key role in it belonging to the state. The latter is appealed to when it becomes necessary to correct and compensate for the market failures. The recent crisis in the housing and utilities sector illustrates to what extent the Belarusian public sector is capable of compensating for the market failures and alleviating social inequality. The article considers why the Soviet welfare system was preserved in Belarus. Based on the extant scholarship, official documents and available secondary data, it argues that President Lukashenko retained the old system to help maintain his personal power. In addition, Belarusian bureaucracy was allowed to pursue its own interests in exchange for the support of the President. Strengthened by favorable exogenous drivers, the system was functioning quite successfully, making the introduction of liberal reforms seemingly unnecessary. Once the external market conditions changed, the state became unable to provide the people with further improvement in wellbeing. The new situation made the President look for a different strategy to ensure his political longevity. The prospects of the current strategy for success, however, are not certain.enHousing Sector CrisisRepublic of BelarusSoviet Welfare SystemPaternalist SystemEgalitarianismCommunist RegimesArticle