[영문]Although low-income countries in transition are facing the challengesof poverty and inequality, evidence on the performance of safety nets inthese countries is scarce. This article uses micro-file data from a nationallyrepresentative household budget survey to analyze the existing socialassistance programs in Azerbaijan, a low income country in transition,from the perspectives of poverty and inequality reduction. The empiricalevidence presented in this paper indicates that the poverty and inequalityreduction effectiveness of social assistance programs is inadequate. First,the benefits are very modest and the poor receive only a small proportionof them. Second, some programs are not aimed at poverty reduction bydesign. Third, the heterogeneous nature of poverty and the significantscale of shadow economy during transition make the identification of thepoor complicated. Finally, the existing patchwork of numerous programswith small-scale benefits is costly and administratively demanding. Aconsolidated and better designed social assistance program is needed toeffectively tackle the challenges of poverty and inequality in Azerbaijan.