Solidarity and Productivity in a Changing World:

How Well Can the Social Safety Nets of the Middle East and North Africa Region Adapt?

Summary: Social safety nets (SSN) are a crucial component of a well functioning economy, as an instrument to enable
investment in human capital, manage household risk, and promote equity. The study will take stock of existing
promising experiences, identify new and emerging challenges to the poor and vulnerable in the region, and explore
other, so far understudied yet important aspects of SSN, such as informal transfers (e.g. Zakat). This report will combine
rigorous analytical work with a series of high-level national and regional consultations among key stakeholders—the
constituency for change—and an innovation marketplace to bring positive examples to the forefront.

I. Introduction

1. Social safety nets (SSNs) play an important role in all modern-day welfare states and the
countries of the Middle East and North Africa region (MENA) are no exception. Most of the region’s
spending on SSNs, however, is used to finance energy and food price subsidies, the largest parts of
which benefit the non-poor rather than the poor. According to a new set of data compiled from
individual World Bank country reports covering 87 developing and transition countries during 1996–2006
(Weigand and Grosh, 2008), the MENA Region spends the most on SSNs (2.2 percent of GDP on average),
followed by Europe and Central Asia (1.7 percent on average), and Latin America and the Caribbean (1.3
percent on average).1 As in other regions, safety nets in MENA countries differ along many dimensions –
design, size, target beneficiaries, coverage, effectiveness, institutional constraints, and innovative features.
They include price subsidies, cash and near cash transfers, in kind transfers, labor-intensive public works or
workfare programs, and fee waiver schemes. While not all exist in every country and there have been
significant changes in composition over time, most MENA countries rely substantially on food and energy
price subsidies. As we establish later in this concept note, if SSN spending were computed excluding
subsidies, the picture changes dramatically: overall SSN spending and the proportion of the poor covered
would fall significantly.

Figure 1. Social Safety Net Expenditure (% GDP, Selected Countries and Years)
Social Assistance Expenditures as a % of GDP
All countries (n=55)
5.0
4.5
4.0
3.5
3.0
% of GDP

2.5
2.0
1.5
1.0
0.5
0.0
Argenti…
Azerba…

Slovak…
Bosnia…

Kyrgyz…
Bangla…
Madag…
Kazak…
St.…

Guate…
Nicara…
Russia…

Maced…

Philippi…
Domini…
Costa…
Monte…
Uzbeki…

Venez…
Czech…

Uruguay
Tajikistan

Jamaica

Georgia

Grenada

Dominica

Ukraine
Ecuador
Brazil
Peru
Pakistan
Colombia
Chile
Mexico
Jordan

Serbia

Morocco

Tunisia
Iran
Moldova

Poland
Ethiopia
Bulgaria
Romania

Mongolia

Albania
Sri Lanka

Algeria

Croatia

St. Lucia
Armenia
Vietnam

Malawi
Yemen

Egypt

Sources: See annexes from Weigand and Grosh (2008) for detailed sources for developing and transition countries, OECD 2004.

2. While inclusive, MENA SSN are not effective in protecting vulnerable households against
permanent human capital losses. In MENA in 2005, 17% of the population lived in poverty2, 5% in
extreme poverty3 and many families were concentrated just around the poverty line. It is these groups who
                                                            
1
Note that these numbers should be interpreted with caution as the inclusion/exclusion of subsidies can imply non-comparabilities.
The proposed study in this concept note will select/ reconstruct some of the comparisons.
2
With less than $2-a-day at PPP in 2005. 
3
 With less than $1.25-a-day. 

1 
 
together constitute the most vulnerable segments of society due to structural factors and shock inducted (see
Yemtsov, 2010). A key indicator that SSNs in MENA have not performed effectively to protect these
vulnerable households is that early childhood malnutrition is unexpectedly high in the region, in both low
income countries and some of the middle-income countries. Malnutrition rates among children are
alarmingly high in Yemen (58%) and Iraq (28%), as well as in certain areas of middle-income countries
(World Bank, 2010a). These high rates of child malnutrition can have irreversible repercussions in terms of
lost cognitive ability and income earning potential as an adult. There is also evidence that the lack of
opportunity if born in deprived rural or urban slum areas, and limited access to good child care practices
and services, can play a crucial role in locking a child into a low-productivity path for life. In the face of
unemployment and catastrophic health shocks, moreover, many households slip into poverty, increasing the
likelihood of human capital depletion. All this takes place in a dynamic context, where new realities (like
climate change, conflict, and price volatility) bring additional challenges to households in MENA (see
Section II for further discussion). The existing levels of these lost opportunities for poor and vulnerable
households indicates that SSNs in MENA are falling short of achieving either their redistributive function
(equalizing opportunities across more and less-advantaged groups) or their insurance function (protecting
against long-term losses consequent to short-duration shocks).

3. Furthermore, the recent food, fuel, and financial crises underscored the need for a more cost-
effective set of SSN tools capable of being scaled up during crises. The region’s high dependence on oil
revenues and position as large net food importer of 50% of its food needs expose the region to high price
variability. As countries in the region tried to ramp up their SSNs to shield large portions of the populations
from price increases, countries that relied heavily on universal food or fuel subsidies had to mobilize large
fiscal contingencies. In an analysis of the impact of the recent crises on poverty in Egypt (World Bank,
2010b), the Bank finds that while the expansion of food subsidies had a visible impact on poverty and has
prevented some of the worst effects of the food crisis, they achieved this impact in a very costly way. If
Egypt would channel what is spent now on an expanded system of food ration cards to a system of better
targeted social transfers or would re-target food spending, it would at least double the poverty reduction
impact of its social protection spending. The emerging evidence also indicates that where cash-based,
targeted SSN instruments capable of being scaled up flexibly co-existed with subsidy-based SSNs, the
preparedness of the system for a rapid and more cost-effective crisis response was much greater.

4. Social safety nets (sometimes termed “welfare” or “social assistance”) were defined in the
Weigand and Grosh (2008) review as non-contributory transfers targeted in some manner to the poor or
vulnerable. We propose to use the same definition for the study here. This definition of social safety nets
focuses on publicly financed safety nets, i.e., those funded by national or local government or by official
international aid, and thus does not include informal transfers between households, or between households
and private agencies. In the MENA region, however, a significant feature in all countries is the system of
zakat, based on Islamic principles, a social transfer from better-off to poorer households. Given its likely
importance for the region in size and impact, our study proposes to supplement the analysis of publicly-
financed SSNs with information on zakat whenever available (Egypt and Yemen) and through new data
collection.

5. This Concept Note outlines a report which will focus on the main vulnerabilities facing
households in MENA countries, available policy options to make SSNs more effective, and the
political economy of SSN reform in the region. To provide a better understanding of the effectiveness of
existing SSNs in MENA and the policy options to strengthen them, the proposed study will: (a) document
and assess their effectiveness in meeting the major risks and emerging vulnerability challenges faced by the
population in the region; (b) identify policy options to address identified weaknesses; and (c) ground these
policy options in a better understanding of the political economy of SSN reforms in the region developed
through a series of national consultations. The consultation component consists of a series of high level
round tables at the national level in two countries and a regional summit.

2 
 
II. Risks and Vulnerability in MENA

6. The study proposes to focus on those selected dimensions of household vulnerability in the
region that have the potential to be most damaging to the economic wellbeing and productive
potential of the household, and where SSNs are expected to have a major bearing. The study
recognizes that the choice of issues will vary from country to country and that a regional study of this type
cannot satisfactorily address the needs of any individual country. Nonetheless, to partially address the
question of whether the identified risks capture the major challenges or not, they will be validated early
through the country-level consultations which are an integral part of the methodology for this study (see
Section IV). A key additional point of note is that SSNs are not being put forward as the only mechanism
suitable to respond to such vulnerabilities. Rather, the perspective of the study is that effective safety nets
could play an important complementary role in preventing irreversible and/or catastrophic human capital
losses associated with such sources of vulnerability and can be designed to protect households across a
combination of these factors.

A. Unequal opportunities and structural factors can lock a child into a low-productivity path for life

7. Early childhood malnutrition is strikingly high in MENA in both low income countries and
some middle-income ones (see Figure 2), with potentially life-long and irreversible impact. Early
childhood malnutrition is a key source of vulnerability and inequality, and transmission mechanism for
inter-generational poverty. It can increase the risk of morbidity and mortality, impair cognitive
development, and reduce economic productivity. The window of opportunity of nutrition and child
development, moreover, is very early in life - i.e., from conception to 2 years of age. If chronic malnutrition
and cognitive stimulation are not adequately addressed in this period, they can lead to stunting (low height
for age) with irreversible losses in cognitive ability, lower learning outcomes, and lower income earning
potential as an adult. Eight MENA countries (Djibouti, Egypt, Iraq, Kuwait, Libya, Morocco, Syria and
Yemen) face high rates of child malnutrition, as defined by a rate of stunting and/or underweight of at least
20%. The stunting rate of children under 5 in Yemen is as high as 60% (see Figure 2). The rate of wasting
(indicating acute malnutrition) among the children of Djibouti is one the highest in the world (see UNICEF,
2009). In Morocco, stunting affects 29% of children in households in the lowest income quintile and is
higher than the poverty rate (14%), which suggests inadequate food intake as well as poor nutrition
practices (see World Bank, 2010b). In Egypt there appears to be a worrying upturn in stunting rates in
recent years with national prevalence of stunting in children under 5 years at 29% in 2008, and a startling
39.3% in the rural areas of Lower Egypt (Egypt DHS 2008).4

                                                            
4
  In countries where the malnutrition rates extend up into the middle and higher quintiles, international experience
suggests that the assumption should switch from the problem being just lack of income to being also lack of
knowledge/practice. In these situations SSN can be a helpful delivery mechanism but a transfer per se might not be the
main tool, ie in cases where a targeted (conditional or unconditional) cash transfer or a workfare program are going to
be implemented, an associated component can create the incentives to change behaviors. This is now being
implemented in Djibouti and has attracted a high “buy in” from Government and donors. 

3 
 
 Figure 2. Prevalence of Underweight, Wasting, and Stunting
60
50
40
%  of children under 5

30 Underweight

20 Wasting

10 Stunting
0

Source: Adapted from MENA Nutrition Brief, World Bank, 2010. Stunting and underweight rates were obtained
from World Health Statistics 20105. Wasting rates were obtained from the UNICEF’s 2009 State of the World’s
Children6. Rates are based on the 2006 WHO Child Growth Standards. 5

8. Children’s access to good quality care, in addition to health and nutrition, is limited and so is
parenting information. For children aged between 0 and 3, adequate stimulation is needed. Parental
sensitization for interaction with children and childcare provision are still lacking in MENA. Van Ravens &
Aggio (2006) estimated that only 16% of young children in MENA have access to preschool, the lowest
regional average after that of sub-Saharan Africa where the figure is 12%. Kindergartens and nurseries for
children 0 – 3 are rare and often expensive. In Morocco, while the parents go to work, 4% of children under
5 are left alone and 10.6% are left in the care of children under 10 years. More than one third live in a
household that does not have any toy. These proportions increase with poverty and distance to capital city,
and decrease as the level of education of the mother is higher (Ministry of health, 2008 and World Bank,
2010c). In Tunisia in 2009, 88% of kindergartens were run privately, and the coverage in Tunis and other
urban areas is double that in rural areas (UNICEF, 2009). Moreover, behaviors harmful to the baby's health
were commonly reported in a survey on childcare in rural Morocco like: declining exclusive breastfeeding,
negative psycho-affective behavior, and inadequate response in case of diarrhea, scarce verbal
communication with the baby, swaddling, and violence (UNICEF, 2007). In Jordan, a UNICEF survey on
knowledge, attitudes and practices (KAP) in a representative sample of the Jordanian population on early
childhood care revealed that the majority of young parents—and men more so than women—lacked the
necessary information and skills for providing a stimulating environment in the home, especially in areas
related to social and emotional development (see UNICEF, 2009 and 1996 KAP). Following the survey
results, the Jordanian Government promoted initiatives for quality care for young children including
parenting information programs and the creation of public nurseries and kindergartens. Worldwide there is
mounting evidence on the positive impact on the child’s cognitive and socio-emotional development of the
participation of children of low income families in good quality childcare, especially in early ages (0 to 3
years old), including higher schooling and earnings, lower drop out and repetition rates, more stable
employment, and fewer arrests (see Carneiro and Heckman, 2003). Good and affordable childcare programs
can also encourage higher labor force participation by women, which is currently very low in MENA (28%,
the lowest in the world, versus 37% in South Asia and 57% in LAC).6

                                                            
5
 Note: Rates of underweight were not available for Iran, Qatar, Bahrain, United Arab Emirates, or Kuwait. 
6
 Source: World Development indicators, 2009. 

4 
 
9. Children born in lagging areas of relatively rich countries lack opportunity to acquire human
capital. There are pockets of poverty in middle income countries where extreme poverty is prevalent,
access to basic services is lacking, and human development indicators lag considerably below the country’s
average. The disadvantageous circumstances of these areas are likely to undermine the potential of those
born there, independently of their level of effort. As showed in World Bank (2009a) there are spatial
pockets of poverty and low human development outcomes in countries in MENA. Table 1 shows a selection
of human development indicators, outputs and outcomes, for slums, rural and urban areas in Egypt,
Morocco and Yemen. Child health, literacy rates and the net primary education enrolment rate seem to be
significantly poorer in slums and in rural areas of these countries than in urban areas. To try to overcome
the barriers to human capital investments in disadvantaged areas, some pilot programs are underway in
these deprived areas to create additional incentives for parents to send their children to school. For example,
a conditional cash transfer pilot linked to school attendance in Morocco is currently being evaluated (both
on outcomes and lessons to improve it).

Table 1. Human development indicators in slums, rural and urban areas

Country % of malnourished % of births attended % of children Female literacy rate
children under 5 by skilled health under 5 years with (%)
(underweight) personnel diarrhoea
urban rural slum Urban rural Slum urban rural slum urban rural slum
Egypt 6.8 9.6 10.7 86.7 59.0 76.6 16.8 20.2 23.7 73.7 42.9 60.2
Morocco 6.5 13.9 13.9 85.3 39.5 39.1 11.5 12.4 13.4 67.5 24.6 53.4
Yemen 24.5 30.7 29.5 45.8 10.0 35.1 25.7 35.8 32.6 37.4 6.2 24.0
Source: World Bank, 2009a.

B. Idiosyncratic shocks related to youth unemployment and health can precipitate poverty and destitution 

10. High unemployment and poor job quality are key challenges for MENA youth: the region’s
youth are of working age but sluggish labor markets are not able to absorb them. MENA faces the
highest growth rate of working-age population in the world. About a third of the population in MENA
(32%) is below 14 years, with an overall fertility rate of 2.9 (6 for Yemen). This is reflected in the
unemployment rate for the young which is, at 26.8%, the world’s highest. For some countries, such as
Algeria, the youth unemployment rate is as high as 43%, as shown in figure 3. Among educated first-time
job seekers this rate is even higher: in Tunisia, 46% of educated job seekers are unemployed 8 months after
obtaining a university degree and 32% remain unemployed 3.5 years after university. In addition, among
those that do find a job, informality is rampant. In Egypt and Tunisia, for example, more than half of
workers do not have a contract, in Egypt the share without social security coverage increased by 10
percentage points between 1998 and 2006 and in Morocco 80% of the population is not covered by pension. 
 
Figure 3: Youth unemployment in MENA, selected countries
50

40

30

20

10

0
Algeria West Bank  Egypt Tunisia Jordan Lebanon Syrian Arab  Morocco
and Gaza Strip Republic
Youth unemployment rate Ratio of youth–to‐adult unemployment rates

Source: World Bank, 2010c. Data for Algeria 2004, WBG 2007, Egypt 2005, Jordan 2008, Morocco 2007, Syria 2003, Tunisia 2005

5 
 
11. Catastrophic health care costs are widespread. While coverage by social health insurance
schemes and free health services are extensive in most countries in MENA, many households still face large
and, indeed, catastrophic health costs. Catastrophic (health cost) effects are commonly defined as occurring
when health care expenditures faced by a household exceed 10% of total household expenditures or 40% of
household expenditures net of food spending. Relatedly but distinctly, impoverishment effects are when a
household becomes poor following the need to pay for the health care services that they receive. The
MENA Health Policy Study (World Bank, 2010a) finds high levels of catastrophic health costs in several
countries in the region. In Lebanon, for example, in 2004/05 about 13% of households were facing severe
financial strain following ill health of household members (see Figure 4). The study also finds significant
impoverishment effects related to health (see Table 2), with an alarming increase in household poverty
headcount ratios post-illness in a number of countries7. The main drivers of these health-related costs are
the high levels of out-of-pocket (OOP) expenditures incurred by households in these countries, despite
health fee waivers and services often paid for by the state.

Figure 4. Incidence of catastrophic health Table 2. Out-of-Pocket Spending and

expenditures in MENA countries Impoverishment Effects
(Proportion of all households incurring catastrophic health care
expenditures) Pre- Post-
payment payment
14% poverty poverty Absolute Relative
Country headcount headcount difference difference
12% % % % %
households households difference difference
10% Yemen
(2005/6) 20.3 21.9 1.6 7.9
8% Libya
(2003/4) 1.7 1.8 0.1 5.6
6% Lebanon
(2004/5) 27.5 31.6 4.1 14.9
4% Palestinian
Territories
2% (2005) 13.7 25.1 11.4 82.9
0% Iran (2006) 13.6 15.4 1.8 13.2
Tunisia 
West Bank 
Lebanon 

Egypt 
(2005/6)

(2003/4)

(2004/5)

(2007)
and Gaza 

(2005)
Yemen 

Libya 

Egypt (2007) 31.8 36.1 4.3 13.5

(2005)

Tunisia
(2005) 3.7 4.4 0.7 17.8

Source: World Bank 2010a. Calculated using data from national

household surveys.

C. Covariate shocks pose new challenges

12. Climate change will likely have unprecedented impacts in the region on interdependent
human and natural systems. MENA is one of the most vulnerable regions to climate change, due to its
water scarcity (the highest in the world), its high dependency on climate-sensitive agriculture and to the
large share of population and economic activity located in flood-prone urban coastal zones. This will have
impacts on human well-being in the region and, very likely, poor and vulnerable households and
communities will suffer the most from climate change, because of their higher exposure and sensitivity to
risks associated with climate change and their lower capacity to manage the risks and prevent negative
impacts on well-being. The Intergovernmental Panel on Climate Change (IPCC) identifies five core reasons
for concern, of which two are worth highlighting for our purposes: the uneven distribution of impacts,
meaning that some groups of people will be more immediately vulnerable than others; and aggregate
impacts, implying that vulnerabilities will increase over time (World Bank 2008a and 2008b). Changes in
                                                            
7
For details on the methodology for these calculations see World Bank 2010a.

6 
 
weather patterns are expected not only with respect to shifts in the means (e.g. temperatures, precipitation)
leading to changing agro-ecological zones and production patterns, but also increased variability and, thus,
uncertainty. Existing forms of vulnerability are expected to be compounded by climate-change related risks.
These include water stress, food insecurity related to more frequent and longer-lasting droughts,
desertification, new health risks, increasing frequency and severity of extreme weather events, and large
population displacements related to sea-level rises and changing ability of local ecosystems to support
livelihoods at previous levels.

13. According to the Bank’s preliminary analysis, these impacts are likely to be particularly high
in most parts of the MENA region (World Bank 2008a and b). Higher temperatures and reduced
precipitation leading to increased occurrence of droughts is already thought to be materializing in the
Maghreb. It is further estimated that an additional 80–100 million people will be exposed to water stress by
2025, which is likely to result in increased pressure on groundwater resources, and attendant rise in
potential conflict, diarrheal diseases, and malnutrition. In addition, agriculture yields, especially in rainfed
areas, are expected to fluctuate more widely, ultimately falling to a significantly lower long-term average.
In urban areas in North Africa, a temperature increase of 1-3 degrees could expose 6–25 million people to
coastal flooding. Communities living in low-lying coastal areas in Tunisia, Qatar, Libya, UAE, Kuwait, and
Egypt are at particular risk. This will effect communities in both urban (port cities) and rural areas. All
households across a sub-region may be at risk, but particular pockets which are already poor, e.g. fishing
communities, may have the least resources to cope and rebuild livelihoods. The linked issue of the effect of
climate change and migration is currently being analysed and a new climate change strategy is being
launched in MENA.

14. The likelihood of conflict and violence is high across the region with long-term human capital
consequences for households. There is evidence that conflict/violence in countries in the region led to
injury and the death of working members’ of households, which is often associated with perverse coping
strategies in the short-term which damage long-term human capital accumulation. These can include
strategies such as withdrawal of children from school, inadequate use of health-care, and inadequate diets.
In Iraq, for example, conflict-related morbidity and mortality has been associated with asset sales by
households, higher school dropout, and worse health outcomes for children (Silva and Thirumurthy, 2010).
In West Bank and Gaza, conflict threatens people’s livelihoods, access to food, health and education:
approximately 40% of Gaza households live in extreme poverty and 80% are dependent on food assistance
(ILO, 2008), 32% of all fatalities were children and as many as 1,709 were wounded (see UN-OCHA,
2009), and primary school enrolment decreased dramatically from around 95% in 2002 to 80% in 2005
(UNDP, 2009). Illustrative of the importance of conflicts as a risk is the result of a recent UNDP human
security survey that reported that when asked to specify the most important source of threat for themselves,
in West Bank and Gaza foreign occupation ranked as the most serious threat, followed by deteriorating
economic conditions, deteriorating political conditions, and a lack of personal security (see UNDP, 2009)).8

15. The increasing volatility of commodity prices, as well as the close linkages between the
financial sector and the real economy, will likely increase the frequency of price shocks households in
MENA face compared to the 1980s and 90s. Food price shocks have a high impact in MENA given that
as much as 50% of consumed food is imported. Due to the reliance on subsidies, MENA countries are also
increasingly affected by energy price shocks. Moreover, while the increased integration of MENA
economies with international financial markets as a result of liberalization and structural reforms has
brought many benefits (e.g. greater FDI), greater integration also means that market irregularities elsewhere
in the world are translating into economic growth shocks locally.

                                                            
8
For more details on the effects of conflicts on poverty, see the ongoing conflict regional work.

7 
 
III. Proposed Methodology, Audience, Outputs and Links with Ongoing Regional and Country
Initiatives

16. This activity will combine (i) rigorous analytical work with (ii) a series of high-level national
and regional consultations among key stakeholders and (iii) an innovation marketplace to showcase
regional programs/initiatives that are at the cutting-edge of SSN service delivery and international
experiences in other regions on subsidy reforms and high performing SSN interventions.

i. The analytical work consists of four main activities: (a) stock taking, (b) data collection on
private safety nets/Zakat,9 (c) engaging directly with the anchor in benchmarking the impact of
existing social safety nets in MENA on poverty and inequality relative to other regions (SP
atlas) and (d) identification of policy options for reform and simulation/estimation of the
financing options, affordability and tradeoffs among these options for two countries and a
roadmap for reform.

ii. The consultation component aims at grounding the policy options and providing a better
understanding of the political economy of SSN reforms in MENA. It consists of a series of high
level round tables at the national level and a regional summit. Besides policy makers,
researchers, NGOs, technicians and opinion makers should also engage in the consultations.10
This component is a crucial part of the activity not only to validate the findings and learn how
to communicate the results of the study, but also to tap into the wealth of knowledge/experience
available in the countries that may help to operationalize policy options for the future. To
increase the value added of this component, the deliverable of each consultation will include a
case study of a country where ongoing policy dialogue enabled policy change. This study
should shed light on “the politics of what worked” and identify political factors that enabled
successful policy change. While having stakeholder consultations based on rigorous analytical
work to inform SSN policy is new in MENA, it has been tried very successfully in LAC, and in
particular in Argentina.

iii. The innovation marketplace will showcase regional programs/initiatives that are at the cutting-
edge of SSN service delivery world-wide (such as the universal ID and registration (Egypt);
smart cards (Egypt); energy subsidy reform and compensation (Yemen, Iran); weather-index
financing (Morocco), one-stop shop case management approach (Jordan)) and international
experiences in other regions on subsidy reforms and high performing SSN interventions.

17. To be more effective, a phased approach is proposed:

o a first phase to take stock of: (a) existing programs (in collaboration with HDNSP); (b) the
key innovations in SSN in the region and their initial assessment; (c) additional data collection
in two countries, and (d) the main concepts and policy proposals currently circulating and the
views of a range of stakeholders (what are they saying and why).

o a second phase to deepen the analysis and broaden the consultations, including: (a) identify
policy options to address weaknesses by comparing and contrasting different perspectives and
proposals, drawing in lessons from experience in MENA and elsewhere; (b)
simulating/estimating the financing options, affordability and tradeoffs among the main

                                                            
9
  Recognizing that quantitative surveys might underestimate households’contributions to informal safety nets, the
proposed surveys will be complemented by qualitative surveys. 
10
 Vignettes of policy makers/reforms will be added to each consultation. 

8 
 
 options identified; (c) development of tools and a forum/process to facilitate discussion among
different stakeholders at the national and regional levels.

18. Given the described components of the study, the final report is expected to include the
following chapters, which may be further adjusted following the findings of different preparatory pieces:

Chapter 1. The Context: This introductory chapter will discuss objectives and scope of the study
and outline main risks and vulnerabilities facing households in MENA today. Highlight emerging
dynamics and expected path in next decade, including the impact of climate change in MENA on
household vulnerability and implications for SSNs

Chapter 2. Where we are today: This chapter will take stock of existing social safety nets: assess
their coverage, cost-benefit ratio, effectiveness and impact in inequality and poverty. Beside direct
transfers, it will also update cross-country subsidy analysis (food and energy, both) using the three
dimensions of subsidy performance proposed by Komives et al. (2005): incidence (how well the
subsidy targets benefits to poor households as opposed to other households); coverage (what
proportion of poor households as a whole receive the subsidy); and generosity for subsidies (how
significant is the amount of subsidy received by poor households). Finally, this chapter will, using
the risk matrix defined in chapter 1, identify the main gaps and challenges, and the need for
adaptations to change.

Chapter 3. The political economy of reform from social assistance policy to social policy: This
chapter will summarize the main findings of the consultation process, including four main angles:
(1) the existing concept of solidarity and social contract, (2) the main political constraints to reform,
including the political economy considerations that might imply that, despite tight fiscal constraints
of recent years, universal social programs cannot be easily shifted to a more narrowly targeted
basis, (3) the constituency for change, their perspectives, proposals and vision for the future, and (4)
winners and loser of reforms.

Chapter 4. Innovations in the region: This chapter will document the main innovations in the
region in the domain of SSN, pointing at new instruments, innovative program design features and
impact evaluation results. This will cover initiatives like the universal ID and registration; smart
cards; energy subsidy reform and compensation; weather-index financing in Morocco, impact
evaluation of CCTs; one-stop shop case management approach; and the role of technology in
malnutrition prevention.

Chapter 5. Policy Options within a Political Economy Perspective: This chapter will discuss the
main policy options for enhancing social safety nets and their implementation, including financing
options and affordability as well as political buy in.

19. The analytical component of the study will use data from existing household, Demographic
and Health and World Values surveys. In addition, new data will be collected on private safety nets (e.g.
religious transfer schemes like Zakat) (including givers and receivers of Zakat and their characteristics),
other SSN programs from which the household is receiving assistance, and main coping strategies following
shocks and vignettes. Private safety nets are perceived as having an important role in the region in
achieving effective SSN. However, empirical evidence on their size, scope, and role is limited. The only
sources of data are household surveys that just report whether the household has paid Zakat during the last
year. To fill this gap, an innovative survey has been conducted in Sana’a (Yemen) on solidarity mechanisms
and informal safety nets. The current activity proposes to conduct comparable surveys in two other
countries. This additional data collection would have three main roles. First, to estimate the scope and role
of informal safety nets in MENA. Second, shed light into the interaction with formal (government run)

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social safety net programs. Third, to better understand people’s perceptions of social safety nets current
benefits and future policy options.

20. The envisaged audience for this activity will be both the international and regional
community of practitioners of social safety nets issues, as well as government counterparts in the
dialogue on social protection reform (including targeting and administrative systems reform), subsidy
reform and investment in human capital (in particular, Ministries of Labor and Social Protection, Ministries
of Social Affairs and Ministries of Finance).

21. The expected outcomes of the activity are:

o First phase: (i) Background paper/report taking stock of existing social safety nets in MENA,
(ii) household surveys on solidarity mechanisms and informal safety nets in two countries (but
with the same questionnaire and comparable methodology), in addition to the survey developed
in Yemen in FY10, (iii) external consultations at the country-level in 3 countries, consultative
groups will be defined early next fiscal year, (iv) internal consultations within the World Bank
with RVP, CDs, HD management, SD management, ED management, HD sector staff and with
HDNSP and (iv) a report summarizing the results of the (internal and external) stakeholder
consultations and including an analysis to highlight the main currents of thinking and to
formulate these as policy proposals.

o Second Phase: (i) Regional summit, (ii) analysis of the main policy options emerging from
phase one and simulation results, (iii) innovations marketplace/showcase, and (iv) a expanded
policy note summarizing the analysis, consultations and future options.

Phase one is expected to be completed during FY11 and phase two during FY12.

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