Economy of liabilities: incomplete contracts and the cost of social-oriented state

Western governments are usually sent around 30% of GDP on social objectives. Funding is provided through tax payments under the tax on current income (hereinafter - PAYGO, pay-as-you-go). How effective are these transfers and whether the market or other mechanisms to improve this process? The problem arises because no one individual does not exist by itself. During the life cycle, there are several inevitable periods of dependency when people do not earn much and can not offer: maternity, infancy, childhood, education, illness, disability, unemployment, old age. The problem is how to implement the transfer of resources from the "producers" to "dependents" throughout the life cycle. Market solutions for individuals is the accumulation of financial assets and their allocation over the life cycle by means of long-term contracts with financial intermediaries.