The IMF’s lending programs are still heavily focused on austerity, and its strategy on social spending has not represented the sea-change that the organization advertised. Alternative approaches rooted in principles of universalism can be employed to build up durable and resilient social protection systems.
The paper evaluates the International Monetary Fund’s (IMF) performance in supporting social spending in Global South countries through 21 loans from 2020-2022. Despite the IMF’s claims of prioritizing social spending, austerity measures persist in IMF programs, leading to decreased fiscal space in 15 out of 21 countries studied. Social spending floors, meant to ensure minimum social spending levels, lack clear definitions and fail to deliver substantial increases over time, often eroded by inflation. The IMF’s shift towards universal social protection is hindered by high debt burdens in Global South countries, necessitating comprehensive debt resolution strategies. The paper suggests that the IMF should adopt universalist policies for social protection, drawing on the World Bank’s focus on universal social protection in its lending operations. It concludes that the IMF’s Social Spending Floor initiative is inadequate compared to the International Labor Organization’s Social Protection Floor approach, which advocates for universal access to social services. This paper critically examines the IMF’s social spending initiatives, highlighting the persistence of austerity measures and the need for a shift towards universal social protection policies to address economic and social challenges in Global South countries.