Inclusion and Resilience

The Current State of SSNs
in the Middle East and
North Africa
Despite the needs described above, the Middle East and North
Africa lags behind other regions in the efficient use of SSN
resources. Most countries in the region adopt one of two approaches
to SSNs: (a) relying primarily on inefficient and pro-rich universal
subsidies or ration programs, effectively crowding out more effective
interventions; or (b) offering a multitude of small and fragmented
programs that do not have a significant impact on poverty and inequality
because of their low coverage, high leakage, and limited benefit levels.
Universal Subsidies at the Expense of More Effective
Programs
Subsidy spending in the Middle East and North Africa is much
higher in both absolute and relative terms than it is in other regions.
In particular, the region’s countries spend, on average, 5.7 percent
of GDP on subsidies, as opposed to 1.3 percent of GDP in the
average benchmark developing country, as figure 13 shows. With the
notable exception of Iraq, the region’s countries spend much more on
the more distortionary and pro-rich fuel subsidies (4.5 percent of GDP
on average) than on food subsidies and ration cards (1.1 percent of
GDP on average), as shown in figure 14. Subsidies capture substantial
financial resources that could be spent on more efficient and effective
SSN programs, as noted in figure 15.
Subsidies aside, SSNs in the Middle East and North Africa are fragmented
among many small programs. Administrative data collected
as part of this study (Middle East and North Africa SSN Inventory, see
Annex A.1 for the description of the methodology) show that nonsubsidy
SSNs in the region are fragmented among many small programs
(see figure 16); for example, in Morocco, 12 different programs all aim
at increasing school enrollment.
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