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On Mainstreaming Social Thinking in Macroeconomic Policies

Amira Othman, Hania Sholkamy, Chahir Zaki 

Abstract

          This paper questions the degree to which social thinking is guiding social policy in Egypt. The apparent fluctuations in social spending coupled with the lack of clear purpose and benchmarks for social programs attest to a conceptual and political compromise whereby the social is at the mercy of non-social considerations. The evidence that supports our main contention is derived from an analysis that poses and answers two seminal questions: first, to what extent social policies are mainstreamed in the design of macroeconomic policies and integrated in economic and development cycles; second, to what extent the Ministry of Finance can sustain its social spending without adding further pressure on its budget. Our main findings show that social protection is still an afterthought added to macroeconomic policies. Second, with a limited fiscal space, Egypt has to work on the revenue side of the budget to generate additional room for more-comprehensive social spending (whether explicit, such as social protection programs, or implicit, such as education and health spending). Moreover, a bottom-up approach that involves different stakeholders and is based on comprehensive datasets will lead to more socially-desirable outcomes. The findings and observations made in this paper serve to guide a post-COVID-19 policy world, as social protection and spending are essential for a post-COVID social recovery, especially as the society and country come face to face with the consequences of limited social support amidst crises.