IMF's new Strategy for Engagement on Social Spending
review by Barry Herman
Four years have passed since the International Monetary Fund adopted a new Strategy for Engagement on Social Spending that was meant to increase the support that IMF gives to national policies on social protection, health and education. The Fund interprets this as instructing its staff to focus on the adequacy, efficiency and sustainability of social programs when they can affect macroeconomic conditions (are “macro-critical”) in member countries. The staff make their judgments during annual assessments of macroeconomic conditions in individual countries or when devising policy adjustment programs with countries that need to work toward recovery from macroeconomic crises. One way to assess how the new strategy is being implemented is to look for changes in IMF advice and the policy requirements for IMF loans. Results so far have not been encouraging, although it is still early. Another way is to examine the guidance that IMF gives its staff when they go on country missions. This paper takes the latter approach. While the IMF has not issued a formal guidance note to staff as of 2023, it has published two interim guidance papers that give insight into the strengths and weaknesses of IMF thinking on how to implement its strategy. This paper supports some aspects and takes issue with other aspects of the guidance thus far given.
See new comment on subsequent IMF note on health spending here >>>
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FINANCING UNIVERSAL SOCIAL PROTECTION IN DEVELOPING COUNTRIES
Social protection needs to be a fundamental part of national economic and development policy in all countries in order to realize the economic and social rights of all the world's people. SocDevJustice has joined with other civil society organizations to fight, especially in developing countries, for adequate floors of basic social protection along the life cycle, from infant and child support through social pensions for the elderly. We do this primarily as a founding member of the Global Coalition for Social Protection Floors (GCSPF), a global network of over 100 civil society organizations and trade unions (see details here >> ).
For background on the role of social protection in reducing inequality see here >>>
The International Labour Organization (ILO) is the lead United Nations agency assisting countries in building social protection floors. See its work here >>> and a background video illustrating social protection policies in different parts of the developing world here >>>
Work of on social protection on which SocDevJustice engages includes
- providing expertise and advocacy in the development of a new institutional view on prioritising social protection and other forms of social spending by the International Monetary Fund (IMF) in its interactions with developing countries (see our joint statement here >>> )
- participating in "side events" on social protection at the United Nations and at the spring and annual joint meetings of the IMF and the World Bank (see details here >>>)
- advocating for inclusion of sustainably financed social protection in international agreements (see here >>>)
- assisting the European Union-supported joint programme on improving synergies between social protection and public finance management in four developing countries, Cambodia, Nepal, Senegal and Uganda (see here >>>), and in
- supporting global advocacy campaigns of the Global Coalition for Social Protection Floors (GCSPF).
The current global advocacy campaign focuses on mobilizing international support for creating an international fund to help finance technical assistance and support for social protection programmes in developing countries. The most recent initiative is the letter to the Group of 20 major economy countries.
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