Author: Colin Powers

Social and healthcare policy have been reformed significantly in Egypt, Morocco, and Tunisia over the past ten years. On the healthcare front, governments have moved further down the track of becoming insurers rather than service providers. On social policy, reforms have yielded conditional social protection arrangements alongside reconfigurations to contributory social insurance programs. Despite having a few successes on the board, the return on these reform pushes have been underwhelming. This report contends that such outcomes stem from two primary causes. The first is the popular foundations of power. Increasingly maintained through the administration of tax code welfarism, these foundations redound onto social and healthcare policy failures by depriving governments of the revenues needed to fund existing obligations–never mind those needed to build better alternatives. The second cause is national growth regimes. These regimes generate growth rates consistently below potential as well as low labor force participation and pervasive informality. For social insurance, the consequences are dire. Facing declining numbers of new contributors and growing numbers of (longer living) retirees, pension systems built upon the pay-as-you-go model are losing their grasp on financial viability. At the same time, low growth worsens tax revenue troubles, making it more difficult to cover pension fund deficits or to develop the publicly-funded, non-employment tied social and healthcare insurance systems that are so sorely needed.

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