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The IMF and Social Protection: A lost cause or is there hope?

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For all its ambivalence, the IMF is a, if not the, key actor when it comes to social protection arrangements in low- and middle-income countries, writes Philip Alston.  In a new report that I will be presenting to the UN Human Rights Council on 21st June – but which has now been made public (UN document A/HRC/38/33) – I examine its approach to social protection and make a range of recommendations as to how it could do far better in this area.

The report is based on extensive research and consultation with experts, as well as a week spent talking with staff and management at the Fund in DC.  It also draws upon my own interactions in the field with Fund staff and other national and international experts in my capacity as UN Special Rapporteur on extreme poverty and human rights.  It takes limited account of World Bank perspectives since the Bank went out of its way to refuse to meet with me, presumably because they are still smarting over having been called a ‘human rights-free zone’ in my 2015 report. “Pathetic,” as Trump might Tweet.

The main thrust of the report is that the IMF has, in fact, changed significantly in recent years in terms of some of its key policy assumptions and its preparedness to adopt an expanded template as to what issues should be considered ‘macro-critical’.  Its work on economic inequality and on gender inequality is a far cry from the positions it took not so long ago.  But its failure to bite the bullet, so to speak, on military expenditures, its pussyfooting on corruption, and its taboo on mentioning human rights standards, still stand out as areas in which much stronger measures are needed.

But the focus of my report is on social protection.  Here the Fund scores relatively well on rhetoric but rather poorly on practice.  It has accepted that social protection issues might reach the threshold required in order to be considered macro-critical.  That means that the issue should be considered as part of the overall calculations it makes when advising states on fiscal policy in general and especially in the context of fiscal consolidation required to qualify for IMF assistance.  The recent report by the Fund’s Independent Evaluation Office (IEO) is very helpful in highlighting some of the shortcomings in implementing this approach. My own assessment is that social protection is much lower on the list of priorities than the IEO and the Fund’s defenders would suggest.  My recent country visit to Ghana illustrated this. In its work there, the Fund has ticked all of the boxes in terms of requiring a social spending floor in its loan agreement with the Government of Ghana and listing a diverse array of programmes as being important in that context.  But, in practice it has done virtually nothing to ensure that social protection is taken seriously by the Government.

In terms of specific issues, the report looks at: the confusion around defining social protection for Fund purposes; the continuing fetishisation of targeting despite compelling critiques from experts as diverse as Stephen Kidd and Martin Ravallion; the place of social protection in subsidy reform; the Fund’s failure to cooperate with the ILO and UNICEF on this issue; its love-hate relationship with the World Bank; and, the importance of upholding rather than undermining democratic structures in the name of supporting the superiority of technocratic fixes.

The report concludes by observing that, to date, the “IMF has been an organization with a large brain, an unhealthy ego and a tiny conscience. If it takes social protection on board seriously, rather than making a tokenistic commitment to minimal safety nets, it can show that it has actually learned from its past mistakes”.

The Fund’s current development of a strategic framework to engage with social protection provides an opportunity to acknowledge the inadequacy of existing practices and to work out how best to genuinely embrace social protection as a key macroeconomic goal. The adoption of a more proactive and authentic social protection agenda will be difficult as long as the Fund remains an organisation consisting predominantly of white, Western-trained, male economists. Achieving real internal diversity needs to be higher on its agenda. And, the Fund’s engagement with civil society organisations needs to go far beyond the public relations exercise that it mostly is at present.  It is to be hoped that the current consultations on its strategic framework and social protection will provide a starting point to enable the Fund to take account of external viewpoints, which it has so far been notably resistant to doing.

Click to view the report here.

Philip Alston is an international law scholar and human rights practitioner who was appointed the UN Special Rapporteur on extreme poverty and human rights in 2014. In this capacity he has emphasised how a human rights framework is critical to address extreme inequality and has undertaken an investigation into the effects of extreme poverty in the United States.

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