Assessment of IMF recommendations: social protection and employment - - PowerPoint PPT Presentation

Assessment of IMF recommendations: social protection and employment p p y

Rathin Roy Raquel Ramos and Fábio Veras Rathin Roy, Raquel Ramos and Fábio Veras International Policy Centre for Inclusive Growth (UNDP) ODI International Conference on Financing Social Protection in LICs: Finding the Common Ground 26 & 27 May 2011 in LICs: Finding the Common Ground 26 & 27 May 2011 London

Assessment of IMF recommendations…

What is this research about?

• An assessment of changes in policy recommendations of IMF after

the crisis… as promised by its most prestigious figures. p y p g g

• Acknowledgement of double objective – inflation /stabilization as

well as employment/output.

• E

h i t ti t bili ti li l t f i ll

• Emphasis on automatic stabilizers – anti‐cyclical transfers specially

to those who would consume more…

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Assessment of IMF recommendations…

Dimensions:

• Authors will analyze how recommendations on inflation,

exchange rate, fiscal consolidation and social g protection/employment are being dealt with after the crisis (on going research).

• In this short presentation we will present some preliminary

findings on social protection/employment on a sample of 25 findings on social protection/employment on a sample of 25 countries.

• Methodology: review of IMF documents including Article IV

Consultation reports.

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Assessment of IMF recommendations…

Sample of countries:

• Income Classification:

 Low income: 5  Lower middle income: 13  Upper middle income: 7

• Regional Classification:

 Sub‐Saharan Africa: 8  Middle East and North Africa: 2  Latin America 4  Latin America: 4  Asia: 8  Europe: 3

Europe: 3

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Assessment of IMF recommendations…

Key questions:

• Do the recommendations differ depending on whether a

country is low income or middle income?

• When referring to SP does IMF look at how to find fiscal space

to expand SP/employment programmes? to expand SP/employment programmes?

• Is employment treated as a macroeconomic indicators or just

as an indicator of whether or not labour market clears?

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Assessment of IMF recommendations…

Some preliminary findings:

• Out of 25 countries in the sample social policy and/or social

protection and/or employment is just mentioned for 12 of th them.

• But when they are mentioned that is not necessarily because
• But when they are mentioned that is not necessarily because
• f their “per se” value. Sometimes they are just an indicator of

how the economy is progressing, particular, employment (indicator of over/under heated economy)

• A f

fi l d i l lki

• As for fiscal space, most recommendations rely on walking

away from general subsidies towards better targeted transfers transfers.

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Assessment of IMF recommendations…

Some preliminary findings:

• For low income and low middle income countries almost

nothing is said about social policy/social protection/employment For them most of the protection/employment. For them most of the recommendations are around public workers “rent‐seeking” behaviour driving overall wages/costs ups. Need to liberalize behaviour driving overall wages/costs ups. Need to liberali e labour market.

• In some cases for LICs, agricultural policies – improved seeds,

fertilizers are seeing as the best anti‐poverty programme.

• Core social protection/social transfer policies programmes are
• nly mentioned for emerging economies that are already on
• nly mentioned for emerging economies that are already on

the way of implementing them.

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Assessment of IMF recommendations…

Some preliminary findings:

• Recommendations with regard to Social protection

programme in emerging economies look at the following i ) b tit ti f l b idi b) f issues: a) substitution of general subsidies, b) ways of improving targeting, c) need to increase internal consumption and fight poverty d) improving human capital and fight poverty, d) improving human capital.

• General impression that discourse on automatic stabilizers is a

discourse for European and high middle income countries.

• l

k bl

• Employment is not seen as key macroeconomic variable.

Indicator for marker clearing policies only.

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Assessment of IMF recommendations…

Many Thanks (rathin.roy@ipc‐undp.org)

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