THE SOCIAL SECURITY SECTOR plays an important economic and social role in many developing and developed countries. Although most developing countries are still at the beginning of the process aimed at increasing the size of the social security sector, there are indications that they are moving fast on the same road followed by developed countries. Social security programs have been introduced and expanded because of the inadequacies of older systems,1 the development of a new ethic, and the tendency of social security expenditures to grow with per capita national income. Growth of funded programs can also be explained by their role in mobilizing resources for investment.2
With special reference to the developing countries,3 this paper intends (1) to measure the importance of the social security sector4 and (2) to review alternative methods of financing social security in developing countries as to their impact on income redistribution and economic growth. In this way, it will convey a better understanding of the actual and the potential role of social security as a means of savings mobilization for economic development.