This paper reviews the main trends and policy issues with regard to the extension of
social security in developing countries. It begins by defining the concept of social security, and it
examines its linkages with the development process and its impact on poverty reduction.
It then reviews the four main social security programmes, i.e. health insurance, pensions,
unemployment protection and tax-based social benefits. It shows that in many middle-income
countries, statutory social insurance can form the basis for the extension process. However, this
is generally not so in the low-income countries, where only a small minority of the population is
covered by social security. In particular for these countries, the paper pleads for experimentation
with area-based schemes. It also recognizes the need for additional international financing of
some basic social security schemes, if coverage is to be extended to everyone over the next 15 to
25 years. The paper also examines the gender dimension of the extension process.
The paper concludes with outlining some key elements of national and international
strategies. Social security should be recognized as a major instrument to deal with some of the
negative social consequences of globalization. National policies should consist of improving and
reforming statutory social insurance programmes, of promoting community- and area-based
social insurance schemes, and of enhancing cost-effective tax-financed social benefits. At the
international level, there is a need for a few simple indicators on social security coverage, for
advocacy measures to get social security at the top of the development agenda, for
experimentation with new mechanisms to reach workers in the informal economy, as well as for
knowledge development and technical assistance. Many of these elements will be included in the
“Global campaign on social security and coverage for all” that the ILO is to launch at the
beginning of 2003.