International Organizations Lending Policy, are There Strings Attached? A Case Study From the Latest Wave of Reforms in the Albanian Social Security System

Abstract

Pension policy reform in post-communist countries received attention from most international organizations since the early 1990s. Accordingly, Albania has implemented comprehensive liberalization and privatization of the state sector since transitioning to a market economy. This study will look at the impact that the European Union (EU), the World Bank, and the International Monetary Fund had in guiding the Albanian state-run social security system toward principles of decentralization, liberalization and privatization. Specifically, social security reforms between 2009 to 2019 will be examined, along with a focus on the side-effect of the conditions imposed by the three organizations. A mixed-method including literature review and secondary data analysis will empirically evidence growing inequality, with senior citizens poverty rate sharply rising due to reforms in social security. Our conclusions will argue that closer ties with the EU will keep social security in its current form, as the EU does not push for a specific pension system, while the World Bank policy influence will lose ground, thus freeing Albania from periodic social security reforms.