Smoke and mirrors: the role of World Bank and IMF in shaping social security policy in the MENA region

Written by Sarina D. Kidd for the Ford Foundation funded "Inclusive Social Security Policy Forum", this working paper highlights how the international financial institutions (IFIs) shape social security policy in the MENA region.

The International Monetary Fund and the World Bank are two of the most significant IFIs in the MENA region. They have played a critical role in influencing social security policy. The most significant ways the IFIs impact on social security policy is through the provision of loans to governments. These loans are often attached to conditions linked to disbursement, and may specify, for example, that a country must implement a proxy means test or a social registry (a mechanism for undertaking poverty targeting). If the condition is not met, disbursement, or a tranche of the funds, may be withheld. It can be extremely difficult for a government to change the design of a social security scheme if it does not align with one of the conditions in the loan.

The paper concludes that despite evidence showing that inclusive, lifecycle schemes are more effective at reaching persons living on low incomes, the IFIs often use confusing messaging and selective evidence to persuade policy makers that this is not the case.