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Social Policy in Iran

This book provides in-depth analyses of the main social policy components and institutions in Iran. Its
focus is on the period since 1979, although many of the developments are inevitably traced back to
their pre-revolutionary origins. The first part of the book investigates socioeconomic trends and
institutional developments—including the significant role played by post-revolutionary para-
governmental organizations in the delivery of social programs. The remaining chapters analyze the
achievements and challenges of health, education, social insurance, housing, and employment policies,
as well as the macroeconomics of poverty.

Pooya Alaedini is Associate Professor in the Department of Development and Social Policy, Faculty of
Social Sciences, University of Tehran.

The Routledge Political Economy of the Middle East and North Africa
Series
Series editor: Hassan Hakimian, Professor of Economics and Director, Middle
Eastern Studies Department, College of Humanities and Social Sciences (CHSS),
Hamad Bin Khalifa University (HBKU), Qatar.

1. Trade Policy and Economic Integration in the Middle East and North
Africa
Economic boundaries in flux
Edited by Hassan Hakimian and Jeffrey B. Nugent
2. State Formation in Palestine
Viability and governance during a social transformation
Edited by Mushtaq Husain Khan
3. Palestinian Labour Migration to Israel
Land, labour and migrationLeila H. Farsakh
4. Islam and the Everyday World
Public policy dilemmas
Edited by Sohrab Behdad and Farhad Nomani
5. Monetary Policy and Central Banking in the Middle East and North
Africa
Edited by David Cobham and Ghassan Dibeh
6. Economic Performance in the Middle East and North Africa
Institutions, corruption and reform
Edited by Serdar Sayan
7. Economic Liberalization and Turkey
Sübidey Togan
8. The Political Economy of Aid in Palestine
Relief from conflict or development delayed? Sahar Taghdisi-Rad
9. Money in the Middle East and North Africa
Monetary policy frameworks and strategies
Edited by David Cobham and Ghassan Dibeh
10. Iran’s Struggle for Economic Independence
Reform and counter-reform in the post-revolutionary eraEvaleila Pesaran
11. Economic and Trade Policies in the Arab World: Employment,
Poverty Reduction and Integration
Edited by Mahmoud A.T. Elkhafif, Sahar Taghdisi-Rad and Mutasim Elagraa
12. Iran and the Global Economy
Petro populism, Islam and economic sanctions
Edited by Parvin Alizadeh and Hassan Hakimian
13. State-Business Alliances and Economic Development
Turkey, Mexico and North AfricaIşık Özel
14. Social Policy in Iran
Main Components and Institutions
Edited by Pooya Alaedini

Social Policy in Iran

Main Components and Institutions

Edited by Pooya Alaedini

First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 Pooya Alaedini

The right of Pooya Alaedini to be identified as author of this work has been asserted in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other
means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without
permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

A catalog record has been requested for this book

ISBN: [978-0-367-56191-8] (hbk)

ISBN: [978-0-367-56192-5] (pbk)
ISBN: [978-1-003-09675-7] (ebk)

DOI: 10.4324/9781003096757

Typeset in Times New Roman

by Deanta Global Publishing Services, Chennai, India

Contents

List of figures
List of tables
List of contributors
Acknowledgment
Abbreviations

1 Social policy in Iran: An introduction

POOYA ALAEDINI

2 Development of Iran’s social welfare institutions

POOYA ALAEDINI AND REZA OMIDI
3 Iran’s health policy and healthcare system: Achievements and
challenges
ALI HASSANZADEH

4 Education policy in Iran: Developments over the past four decades

REZA OMIDI AND POOYA ALAEDINI

5 Pension funds in Iran: Challenges and options

HESSAM NIKOUPOUR AND NARGES AKBARPOUR-ROSHAN

6 Iran’s housing policies for low-income and vulnerable groups: A

critical assessment
POOYA ALAEDINI AND FARDIN YAZDANI

7 Employment challenges in contemporary Iran: A growing social

policy conundrum
BEHROUZ HADY ZONOOZ

8 Poverty and macroeconomic policies in Iran: A microsimulation

study
DAVOOD SOURI

Index

Figures

1.1 Inflation, Unemployment, and Per Capita Gross Domestic Product, 1970–
2019. Source: World Bank (2020a)
1.2 Gini Trends from Statistical Center of Iran (SCI) and Central Bank of Iran
(CBI), 1978–2019. Source: SCI (2020b); CBI (2020)
A1 Organizational Chart of the Ministry of Cooperatives, Labor, and Social
Welfare. Source: MCLSW (2020)
3.1 Health Sector Landscape in Iran
3.2 Sources of Financing in Iran’s Healthcare Sector. Source: Nouhi et al.
(2019)
3.3 Out-of-pocket Payments by Type of Health Service or Good, 2007–2015
(in Constant 2011 Rials). Source: Hsu et al. (2019:19)
3.4 Out-of-pocket Payments by Type of Health Service in Lowest and Highest
Income Quintiles, 2007–2015 (in Constant 2011 Rials). Source: Hsu et al.
 (2019:20)
4.1 Trends in Education and Government Expenditures in Iran, 1981–2018
(%). Source: World Bank (2020) (Education statistics based on UNESCO
Institute for Statistics)
4.2 Trends in TIMSS Performance for Iran, 1995–2015. Source: Reproduced
from Martin et al. (2016:48,54); Mullis et al. (2016:48,54)
5.1 Trends in Pension Coverage in Iran, 1976–2018. Note: SIFFRTP was
established in 2005. Source: Data for 1976 and 1996 are from MCLSW
(2017); data for other years are from SSO (2019b), CSPO (2018), and
SIFFRTP (2019)
5.2 Changes in Employed and Unemployed Populations (aged 15 and over)
and Unemployment Rates in Iran, 1976–2018. Source: SCI (2019)
5.3 Annual and Average Long-term Growth Rates in the Iranian Economy.
Source: CBI (2020a)
5.4 Inflation and Minimum Wage Growth Rates, 2005–2019. Source: Data on
inflation rates are from CBI (2020b), and data on minimum wages are
from annual approvals of the Council of Ministers
6.1 Land, Home, Rental, Construction, and Consumer Price Indexes—1976–
2017. Source: Based on CBI, 2019
6.2 Changes in Land, Construction, and Housing Prices—1976–2017. Source:
Based on CBI, 2019
6.3 Number of Housing Units Provided to Beneficiaries of State Welfare
Organization. Source: Direct communication with State Welfare
Organization
7.1 Unemployed Population (Aged 10 and Above) in 2018 by Length of
Unemployment and Employment Status during the Previous 5 Years (%).
Source: SCI (2019a)
7.2 Long-term Labor Force Participation Rate of Population Aged 10 Years or
Over, 2005–2018 (%). Source: Reproduced from SCI (2019a:45)
7.3 Unemployment Rates for Men and Women with Higher Education—Years
2006, 2011, and 2016 (%). Source: SCI (2017), census results for 2006,
2011, and 2016
7.4 Decomposition of Total Labor Productivity Growth, 1990–2011 (%).
Source: Reproduced from IMF (2015:20), calculated by the staff of the
International Monetary Fund based on Pen World Tables
7.5 Non-oil GDP Growth at 2011 Constant Prices, Employment Growth, and
Labor Productivity Growth, 1966–2016 (%). Source: CBI (2019b) and SCI
(2019b)
8.1 Graphical Depiction of Measuring the Impact of Economic Policy on
Poverty. Source: Reproduced from Datt et al. (2003)
8.2 Comparing Simulation Results on Poverty Rates
Tables

1.1 Poverty Headcount and Gap, 1986–2017 (2011 purchasing power parity)
1.2 Income Shares of Bottom, Middle, and Top Quantiles and Gini
1.3 Unemployment and Labor Force Participation Rates in 2019 (percent)
1.4 Social Affairs Components in Public Budget over the Last Decade (percent
of total budget)
2.1 Centers and Programs Associated with State Welfare Organization in
Fiscal Year 2018–2019
2.2 Summary of State Welfare Organization’s Key Activities Mandated by Sixth
Development Plan
2.3 Service Centers and Beneficiaries of IKRF in Fiscal Year 2018–2019
3.1 Trends in Some Key Health Indicators
3.2 Health Workforce by Country in Eastern Mediterranean Region in 2017
(Number in 10,000 Population)
3.3 Health Facilities by Country in Eastern Mediterranean Region in 2017
3.4 Key Stakeholders in Iran’s Health System
3.5 Key Health System Initiatives/Reforms in Iran, 1975–2014
3.6 Five-Year National Development Plans (NDPs)—Macro-Directions and
Associated Policy Emphases for Health Sector
3.7 Key Financial Protection Reforms
3.8 Purchasing Policies and Practices
3.9 Key Changes in Insurance Arrangements
3.10 Poverty and Health Expenditures by Country in the Eastern Mediterranean
Region in 2017
4.1 International Comparison of Iran’s Government and Education
Expenditures
4.2 Share of Combined Pre-primary, Primary, and Secondary Education in
Public Budget (%)
4.3 Per-student Government Expenditure (in US dollars and purchasing power
parity terms)
4.4 Literacy Trends for Persons 6 Years of Age and Older, 1956–2016 (%)
4.5 Survival to Last Grade of Primary Education, School Transition, and
Enrolment in Secondary Education (%)
4.6 Types of School in Iran
5.1 Covered Groups and Obligations of Pension Schemes in Iran
5.2 Contribution Rates in Iran’s Pension Schemes
5.3 Active Population (Aged 10+) Covered by Iran’s Pension Funds in 2018 (in
thousands)
5.4 Composition of Employed Population (Aged 10+) by Employment Status
and Place of Residence in 2018 (in thousands)
5.5 Benefit Adequacy of Iran’s Pension Funds, 2018
5.6 Demographic Equilibria at Iran’s Pension Funds
5.7 Financial Equilibria at Iran’s Pension Fund (latest available data)
5.8 Government Assistance to CSPO and AFPS Based on Budget Law (billion
rials)
5.9 Demographic Changes in Iran, 1976–2016
5.10 Breakdown of Investment Income for SSO and CSPO (average for 2014–
2018)
5.11 Short-, Medium-, and Long-term Reform Options for Iran’s Pension Funds
6.1 Land Allocations of National Land and Housing Organization/Urban Land
Organization
6.2 Breakdown of Housing Subsidies between 1991–1992 and 2005–2006
6.3 Subsidies Provided as Part of Mehr Housing Plan for Various Activities
between Iranian Fiscal Years 2009–2010 and 2013–2014
6.4 Population, Housing Stock, and Mortgage Loans
6.5 Breakdown for Sources of Housing Finance, 2002–2015
6.6 Trends in Key Indicators of Housing Access in Urban Areas
6.7 Trends in Key Indicators of Housing Poverty in Urban Areas
6.8 Trends in Key Indicators of Housing Affordability in Urban Areas
7.1 Comparison of Labor Market Regulations in Iran, Turkey, Malaysia, and
South Korea
7.2 Labor Market Efficiency Indexes in Iran and South Korea, 2017–2018
7.3 Interest Rates on Awarded Facilities of Employment Program for Rural and
Transhumant Populations
7.4 Summary of Activities and Funding Sources for Program on Extensive
Production and Employment
8.1 Food Poverty Line, Lower Poverty Line, and Upper Poverty Line in Rural
and Urban Areas in Terms of Per Capita Expenditure for an Adult Person—
2005–2015 (rials)
8.2 Poverty Headcounts Associated with Upper and Lower Poverty Lines in
Urban and Rural Areas (%)
8.3 Employment Status of Household Heads and Income Poverty Rates
Associated with Upper and Lower Poverty Lines, 2005–2015 (%)
8.4 Shares of Household Categories with Employed, Unemployment, and
Inactive Heads among Poor Households, 2005–2015 (%)
8.5 Model Parameters for Base Year
8.6 Model Assumptions on Growth of Output and Employment (%)
8.7 Simulation Results for Model A
8.8 Simulation Results for Model B (Model A + improvements in the
relationship between consumer and producer prices in favor of the poor)
8.9 Simulation Results for Model C (Model B + lower food inflation than
consumer inflation)
8.10 Simulation Results for Model D (Model C + reduced income inequality)

Contributors

Narges Akbarpour-Roshan is Assistant Professor in the Faculty of Economics and Management,

Institute for Humanities and Cultural Studies, and Deputy Director for Research at the Social Security
Research Institute in Tehran, Iran.

Pooya Alaedini is Associate Professor in the Department of Development and Social Policy, Faculty of
Social Sciences, University of Tehran, Iran.

Behrouz Hady Zonooz is a retired member of the Economics Faculty of Allameh Tabataba’i University
in Tehran, Iran—where he taught macroeconomics, industrial economics, and urban and regional
economics.

Ali Hassanzadeh is an ophthalmologist and a member of the Board of Directors, Iran Health Insurance
Organization, Tehran, Iran.

Hessam Nikoupour is Director of Statistics, Data, and Calculation at the Social Security Organization,
Tehran, Iran.

Reza Omidi is Assistant Professor in the Department of Development and Social Policy, Faculty of
Social Sciences, University of Tehran, Iran.

Davood Souri is an economic policy advisor in Tehran, Iran, and a former academic at the Sharif
University of Technology—where he taught economics for some time after receiving his doctorate
from the Virginia Polytechnic Institute and State University.

Fardin Yazdani is a housing and urban economics researcher and advisor based in Tehran, Iran.

Acknowledgment

The work on this book was supported by the Social Security Research Institute in Tehran. I am grateful
to the series editor Professor Hassan Hakimian for his guidance and critical comments on several of the
chapters. My gratitude further goes to Professor Ali Asghar Saeidi for reviewing some of the chapters
and to Ms. Nasim Yeganeh, Ms. Reihaneh Saremi, and Ms. Narges Haghi for their assistance in the
preparation of the manuscripts. I would also like to thank the Routledge team for their diligence and
helpfulness.
Pooya Alaedini

Abbreviations

ADMSS Administration of the Deputy Minister for Social Welfare

AFPS Armed Forces Pension Scheme
ALMP Active labor-market policy
APO Asian Productivity Organization
BF Barakat Foundation
CBI Central Bank of Iran
CHP Comprehensive Housing Plan
CIWD Comprehensive Iranian Welfare Database
CPI Consumer price index
CSPO Civil Servants Pension Organization
CWSS Comprehensive Welfare and Social Security System
DB Defined benefit
DB-PAYG Pay-as-you-go defined benefit
DHHS US Department of Health and Human Services
FLFP Female labor force participation
FMVA Foundation of Martyrs and Veterans Affairs
GDP Gross domestic product
HIV Human immunodeficiency virus
HF Housing Foundation
HSTP Health System Transformation Plan
IHIO Iran Health Insurance Organization
IKRF Imam Khomeini Relief Foundation
ILO International Labor Organization
IMF International Monetary Fund
IOI Inspection Organization of Iran
IRNA Islamic Republic News Agency
IRPHE Institute for Research and Planning in Higher Education
ISSA International Social Security Association
JCPOA Joint Comprehensive Plan of Action
MCLSW Ministry of Cooperatives, Labor, and Social Welfare
MF Mostazafan Foundation
MHP Mehr Housing Plan
MHUD Ministry of Housing and Urban Development
MOHME Ministry of Health and Medical Education
MOU Memorandum of Understanding
MPB Ministry of Plan and Budget
MPO Management and Planning Organization
MRUD Ministry of Road and Urban Development
MWSS Ministry of Welfare and Social Security
NDC Notional defined contribution
NDP National development plan
NEDPD National Employment Development Policy Document
NEET Not in employment, education, or training
NHPAP National Housing Production Action Plan
NIHR National Institute of Health Research
NLHO National Land and Housing Organization
NRU Natural rate of unemployment
NTDC New Towns Development Corporation
OECD Organization for Economic Cooperation and Development
OOP Out-of-pocket
PBO Plan and Budget Organization
PHC Primary healthcare
PO Plan Organization
RCHP Revised Comprehensive Housing Plan
SAC Supreme Audit Court
SAO Social Affairs Organization
SAP Structural Adjustment Program
SBMU Shahid Beheshti University of Medical Sciences
SCCR Supreme Council of the Cultural Revolution
SCI Statistical Center of Iran
SIFFRTP Social Insurance Fund for Farming, Rural, and Transhumant Populations
SSO Social Security Organization
SSOR Social Security Research Institute
SWIFT Society for Worldwide Interbank Telecommunication
SWO State Welfare Organization
TFP Total factor productivity
THE Total health expenditure
TVTO Technical and Vocational Training Organization
UDRO Urban Development and Revitalization Organization
ULO Urban Land Organization
UN United Nations
UNDP United Nations Development Programme
UNESCO United Nations Educational, Scientific, and Cultural Organization
UNHCR United Nations High Commissioner for Refugees
UNICEF United Nations Children’s Fund
VPPSS Vice Presidency of Planning and Strategic Supervision
WEF World Economic Forum
WHO World Health Organization
1 Social policy in Iran
An introduction
Pooya Alaedini
DOI: 10.4324/9781003096757-1

Context and challenges of social policy in Iran

Social policies in the Middle East have been found to differ in significant ways from both the Western
welfare state and the East Asian developmentalist models (Karshenas and Moghadam, 2006, 2009). The
main observation is that many countries in the region have leveraged their oil revenues—often in the
form of populist redistributive initiatives—toward state-building and political legitimation rather than
upholding citizen rights to social services or directly supporting economic development goals. In these
economies, social policy benefits are likely to be viewed as handouts rather than entitlements created
through taxes paid by the citizens and managed by the government. As such, their development
impacts remain low. This is the case even for education, notwithstanding its rapid expansion over the
past half a century from a base significantly lagging behind other regions. While the literacy rates and
average educational attainment in the Middle East remain comparatively low, there is a tendency to
overemphasize tertiary education. Yet this focus is said to be more about credentialism and justification
of patronage in formal sector hiring than pursuing the national goals of development and
industrialization (Ibid.). Substantial gender biases are also highlighted for the case of Middle Eastern
countries—which limit the region in adequately benefiting from its development opportunities, including
the current demographic window of opportunity (Ibid.).
As suggested by Silva et al. (2013:110–111), the level of subsidies on food and fuel is comparatively
high in the Middle East. While these mostly untargeted subsidies are regressive and exaggerate the total
social policy expenditures, non-subsidy spending remains low. Informed by charity and benevolence or
rentierism, social welfare services are also likely to focus on economic vulnerability only and be provided
in an incomplete manner—notwithstanding the guise of administrative universalism (Jawad et al.,
2019:248–249). Some services are accessible to formal sector employees only or to those deemed as
suffering from an absence of a male guardian. Under these circumstances, reduced life satisfaction and
a sense of injustice associated with access to rents, jobs, services, and rights can exacerbate grievances
against the governance structures (World Bank, 2015:29–34). This observation has been made for the
case of Arab countries and in the more recent period, but it can partially describe the context associated
with Iran’s 1979 Revolution as well. Despite significant achievements in the pre-revolutionary period in
terms of economic growth along with the expansion of education and health services, a strong sense of
social injustice appears to have influenced the 1978–1979 revolutionary events and their aftermaths.
These reflections on social policy in the Middle East region call for additional country investigations. A
number of studies have addressed social policy in Iran as a whole—including Messkoub (2006), Harris
(2017), Qarakhani (2018), and a recent book chapter by Tajmazinani (2021). A few others have probed
specific initiatives, institutions, or circumstances. However, the field remains understudied. This book
contributes to these debates by providing in-depth analyses of the main social policy components and
institutions in Iran. Its focus is on the period since 1979, although many of the developments are
inevitably traced back to their pre-revolutionary origins. The Islamic Republic Constitution is specific
about addressing the plight of the downtrodden and emphasizes government responsibilities in
providing employment, education, housing, and social services for all citizens. In the initial post-
revolutionary period, these objectives were largely translated into populist redistribution policies. The
activities would succeed in garnering support for the nascent political system despite their unsystematic
nature. However, they would also preclude the emergence of a rights-based or developmentalist social
policy framework in the country. The outbreak of the Iran–Iraq War, continued political turmoil, and
reduced oil revenues significantly decreased per capita incomes in the 1980s. Yet the government was
successful in running a rationing system during this period, which to some extent acted as a minimal
social safety net. Influenced by political, social, and economic developments, the various components of
social policy in Iran have undergone a series of transformations in the post-war period until now.
The pre-revolutionary social policy framework largely focused on insurance schemes for formal sector
employees. In contrast, the diverse governmental and para-governmental organizations of the post-
revolutionary period have covered different sections of the population through both social protection
and social insurance schemes. Social insurance has continued to expand—although significant gaps in
coverage remain. Rural development was a major goal of the early post-revolutionary initiatives, which
had a significant impact on service delivery in the country’s scattered villages (Shakoori, 2001:71–77).
Further activities over the next two decades resulted in increasing access to piped water and electricity,
improving health indicators, and rising ownership rates for household appliances (Salehi-Isfahani,
2009b:19). During the past 40 years, the expansion of health facilities, social insurance, education, and
social assistance provided to the poor or elderly families has resulted in significant improvements in
social indicators across Iran’s rural areas. In light of such outcomes, the post-revolutionary policy
framework has been described as rural-biased and populist (Salehi-Isfahani, 2019).
Iran’s human development index has continued to increase over the years—from below 0.6 in the
early 1990s to 0.783 in 2019, with a global rank of 70 (UNDP, 2020). This has placed the country within
the high human development category. The positive trend has been associated with considerable
improvements in health indicators alongside the quantitative expansion of education. Furthermore,
poverty in Iran has appeared at levels similar to or below those observed in comparable countries. As
shown in Table 1.1, poverty had a declining trend through the early 2010s.1 National poverty figures,
however, mask significant disparities among regions and between rural and urban areas—although, with
rapid urbanization, there are now as many poor in towns and cities as there are in rural areas (World
Bank, 2018:34).2 The lowest rates in the table are recorded for 2013, that is, three years after the trend
had received an additional boost from the unconditional cash transfer program (carried out in
compensation for the subsidy reform initiative). Due to the persistence of high inflation rates (Figure
1.1), these transfers have continually declined in real value since their initiation—when they constituted
nearly half of the total income of the lowest two income deciles (World Bank, 2018:39). During the last
decade, the country has been subjected to expanding international sanctions and experienced negative
or small growth rates—except for the short period of relative respite experienced in the immediate
aftermath of the Joint Comprehensive Plan of Action (JCPOA).3 The size of the Iranian economy was
reduced by 6.03 and 6.78 percent in 2018 and 2019, respectively (World Bank, 2020b). Since early
2020, Iran has been hit by the COVID-19 pandemic, which is likely to worsen the country’s poverty
circumstances by shrinking its economy. Short-term impacts of positive or negative growth rates on
poverty may be indeterminate. However, the continuation of sanctions, the significant devaluation of the
Iranian rial (which has depreciated significantly in the recent period), and decreasing per capita incomes
are bound to adversely impact households’ welfare (see Farzanegan, Mohammadi Khabbazan, and
Sadeghi, 2016). According to a recent report by the Majles Research Center (2020), Iranians have lost
one-third of the real value of their incomes since 2011, which would take six years of growth at 8
percent per annum to reverse. Furthermore, low-income households appear to have been affected more
severely by the inflationary trend.

Table 1.1 Poverty Headcount and Gap, 1986–2017 (2011 purchasing power
parity)
198619901994199820052006200920132014201520162017
Poverty 45.6 45.3 41.1 36.4 15.6 16.5 14.9 9.9 12.3 12.7 13.5 12.9
headcount ratio
at $5.50/day
(%)
Poverty 22.5 20.9 17.2 15.2 3.9 4.1 4.5 1.6 3 3 3 2.7
headcount ratio
at $3.20/day
(%)
Source: World
Bank (2020a)
 198619901994199820052006200920132014201520162017
Poverty 8 6.7 4 3.4 0.6 0.5 1.1 0.1 0.4 0.4 0.4 0.3
headcount ratio
at $1.90/day
(%)
Poverty gap at 18.6 17.8 15 13.1 4.4 4.6 4.6 2.3 3.3 3.4 3.6 3.4
$5.50/day (%)
Poverty gap at 7.3 6.5 4.6 4 0.9 0.8 1.2 0.3 0.7 0.6 0.7 0.6
$3.20/day (%)
Poverty gap at 1.9 1.7 0.8 0.6 0.1 0.1 0.3 <0.1 0.1 0.1 0.1 0.1
$1.90/day (%)

Source: World
Bank (2020a)

Figure 1.1 Inflation, Unemployment, and Per Capita Gross Domestic Product,
1970–2019. Source: World Bank (2020a)
Inequality declined in the immediate aftermath of the 1979 Revolution as a result of substantial shifts
in fortunes (Salehi-Isfahani, 2009a; Nowshirvani and Clawson, 1994). Figure 1.2 shows Iran’s Gini
trends as reported officially based on the national expenditure–income surveys. Despite the positive
effects of the cash transfers in the early 2010s, the Gini values have hovered around the relatively high
figure of 0.4 since the mid-1980s. Nevertheless, Iran’s expenditure–income Gini figures are not
dissimilar to those seen in countries at comparable levels of economic development.
Figure 1.2 Gini Trends from Statistical Center of Iran (SCI) and Central Bank of
Iran (CBI), 1978–2019. Source: SCI (2020b); CBI (2020)
Information on wealth inequality in Iran remains anecdotal, as is the case for most developing
countries and the Middle East region. Alvaredo et al. (2018) have combined household surveys, national
accounts, income tax data, and wealth data for the Middle East, highlighting the region as the most
unequal in the world. Table 1.2 contains their reported results for Iran (measured in the years 2010 and
2013), indicating significant inequalities in the country. Raghfar and Babapour’s (2016) study has
employed a pseudo-panel constructed by combining the 1984–2014 cross-sectional surveys to probe the
changing patterns of poverty and inequality among different generations as well as mobility and
vulnerability. Their results indicate low absolute and conditional mobility, suggesting both the
persistence of inequality over time and the lack of recovery from income shocks.4

Table 1.2 Income Shares of Bottom, Middle, and Top Quantiles and Gini
Year Bottom 50%Middle 40%Top 10%Top 1%Gini
2010 14% 35% 51% 18% 59%
2013 17% 35% 48% 16% 55%

Source: Alvaredo et al. (2018:21)

Iran’s growth record over the past four decades has been quite discouraging and in stark contrast to
the circumstances prevailing in the 1960s and 1970s. The post-revolutionary national Five-Year
development plans—a total of six since 1989—have continued to focus on growth. However, economic
growth has trailed population expansion. The country’s population grew from 36.396 million in 1979 to
53.185 million in 1989 and was estimated at 83.075 million in 2019 (with three-quarters living in urban
areas) (SCI, 2020a). Per capita gross domestic product remains smaller than it was prior to the 1979
Revolution (Figure 1.1). Related to these is the failure to create adequate employment for the country’s
growing population. Fertility rate has now dropped to replacement levels, notwithstanding the baby
boom in the decade after the Revolution (see Hakimian, 2006; Abbasi-Shavazi et al., 2009).
Furthermore, while population aging will not pose a major problem in the near future, the prospects
appear dim for leveraging the current demographic window of opportunity.
 Table 1.3 records high unemployment rates accompanied by low labor force participation rates in
Iran. Employment and labor force participation rates are particularly low for women as well as the
youth. Inequality in Iran thus has a significant gender/employment aspect (see Chamlou, 2016;
Moghadam, 2006). Furthermore, the combination of high unemployment and inflation rates has led to
high misery index values (Financial Tribune, 2020). These circumstances are indicative of major
problems in development policy, given the country’s significant oil export revenues as well as human
capital and other endowments (see Alaedini, 2018).

Table 1.3 Unemployment and Labor Force Participation Rates in 2019 (percent)
Labor force
Unemployment
participation
Age National Rural UrbanNationalRuralUrban
Total 15+ 11.1 7.5 12.4 45.2 48.1 44.2
15–24 25.5 17.8 28.9 28.3 33.2 26.6
25+ 9.3 6 10.5 48.8 51.7 47.9
Male 15+ 9.5 6 10.7 72.4 77.2 70.9
15–24 22.2 15.1 25.5 44 53.3 40.7
25+ 7.9 4.6 9 78.7 83 77.4
Female 15+ 18.1 13.6 19.8 17.6 19.1 17.1
15–24 37.6 29.1 40.9 12.2 12.8 12
25+ 15.4 11.3 16.8 18.8 20.5 18.2
Source: ILO
(2020)

The past four decades have seen various formulations of Iran’s social justice agenda through a
number of plans and laws. The Law on Structure of Comprehensive Welfare and Social Security System
(Majles, 2004), currently in effect, covers several forms of social insurance and protection and calls for
the reduction of poverty and inequality. The 2025 Vision Document of the Islamic Republic (Majles,
2003) also features such key phrases as “an appropriate income distribution,” “equal opportunities,” and
“elimination of poverty.” The present volume discusses the country’s achievements and challenges in
realizing such aspirations through in-depth investigations of the main social policy components—health,
education, social insurance, housing, and employment—as well as institutional developments and
macroeconomic aspects of poverty. Together the chapters suggest that Iran’s social policy has
significant tasks ahead to create an effective redistribution and protection structure and to sufficiently
contribute to the country’s development objectives.
Other than the provision of social services and safety nets, social policy should arguably also include
a broader set of public policies and programs as well as participation modalities to promote social
welfare (Hall and Midgley, 2004:36–37; Gough, 2004:22). It should also support economic development
policy without losing sight of the intrinsic values of the desired social ends (Mkandawire, 2001). At
present, while little relationship has been established between social and economic development policies
in Iran, in some instances the two even contradict each other. Social services have often been provided
as delayed responses to increasing social problems. Yet little has been done to tackle the dynamics of
poverty and inequality in the country, let alone their root causes that must be explored in Iran’s political
economy. For example, rising home and real estate prices are a major source of inequality in Iran (see
Farzanegan, Gholipour, and Nguyen, 2016). However, the government has been reluctant to mitigate
speculative activities by, among other things, levying appropriate property taxes (which would also
increase municipal revenues that can be used for improved services). Inadequate industrial and
employment, taxation and wealth redistribution, and urban and land-use policies continue to negatively
affect the opportunities and welfare circumstances of a large number of households, who then ought to
be targeted by social assistance programs.5 At the same time, the government has not been able to
create a basic package to protect vulnerable groups. Nor has it sufficiently warmed up to the idea of
creating local-level institutional frameworks toward a more participatory, efficient, and targeted
provision of social services.
 A major issue facing the public sector in Iran is how to adequately finance its social programs. As
observed in a World Bank (2018:19–21) report, government revenues have remained quite small
relative to the size of the Iranian economy. They comprised approximately 17 percent of GDP in 2016–
2017, a figure significantly below international averages—including oil producers and the Middle East
region. Government revenues have fluctuated in relation to oil export earnings, their largest single
source. Due to the effect of the sanctions and reduced income from oil exports, capital expenditure has
suffered in recent periods. Yet the tax base has remained low despite some efforts to broaden it, mostly
by increasing indirect taxes. Taxes on capital gains and profits as well as individuals’ incomes are
collected at much lower rates than in comparable countries. Although rising property prices have
continued to act as a major source of wealth and inequality in Iran, property taxes have remained
minimal and comprised only 0.2 percent of the gross domestic product in 2017–2018 (Ibid, p. 19).
Social affairs have continued to constitute a relatively large part of the government budget over the
years. However, given the disappointing growth record, a rising population, and low levels of
government revenues, per capita spending on social affairs has declined (Messkoub, 2006). Table 1.4
reports on the share of social affairs in the public budget (excluding the large budget for state-owned
companies) over the last decade. This share has expanded from 38.4 percent in 2010–2011 to about
half of the total budget in the most recent period. The share of housing plus urban and rural
development has however decreased significantly. The relative expansion of social affairs in the public
budget has been to a large extent associated with the increasing share of health. In fact, the health
sector has seemingly done better than the other social policy domains over the past decades. For
example, it is the only social policy area in which community-based institutions have been widely
established with respectable results. This outcome is likely to stem from a number of factors—e.g., the
structure of the sector, the makeup of its human capital and levels of personnel remuneration, and its
non-threatening and participatory nature. The health sector further appears to have benefited from the
ethos associated with the government’s Islamic ideology (Underwood, 2004).

Table 1.4 Social Affairs Components in Public Budget over the Last Decade (perce
of total budget)
2010– 2011– 2012– 2013– 2014– 2015– 2017– 2018– 2019– 2020
Category
2011 2012 2013 2014 2015 2016 2018 2019 2020 202
Share of housing 3.1 2.1 2.8 2.5 1.9 1.9 1.7 0.9 1.0 1.0
plus urban and
rural
development
Share of health 5.8 5.6 8.5 8.8 10.8 14.6 13.0 13.1 12.4 11.1
Share of education 13.1 11.0 14.8 11.4 13.2 14.3 15.0 14.2 15.3 14.8
and research
Share of social 16.5 14.5 18.8 16.1 19.5 18.5 19.8 20.4 21.9 21.1
welfare
Total share of social 38.4 33.1 44.9 38.9 45.4 49.4 49.6 48.6 50.6 48.0
affairs
 2010– 2011– 2012– 2013– 2014– 2015– 2017– 2018– 2019– 2020
Category
2011 2012 2013 2014 2015 2016 2018 2019 2020 202
Source: PBO
(2020) (Table 6
of National
Budget Acts—
2010–2020)
Note: Iranian
public budget
categories have
changed on
numerous
occasions. Until
recently, there
existed a
miscellaneous
category with
some social
components.
These are
ignored in the
table.

The situation described above is undoubtedly shaped by Iran’s political economy and the character of
its post-revolutionary governance structure—against the background of the oil export revenues wholly
and unaccountably received by the government. Furthermore, part of the reasons behind the attempts
at reducing expenditures and privatization initiatives must be explored in the nexus of limited revenues
and tax base, the high share of social affairs in the relatively small public budget, and the inevitable
reductions in per capita spending. Yet, privatization and commercialization in Iran have in many
instances taken place to the benefit of various coteries operating within clientelistic structures,
sometimes with conflicting interests. It is one thing to unveil and analyze these dynamics and quite
another to actively call for government downsizing as a solution to the country’s development problems.
Such calls in Iran appear to originate from circles that are inadvertently or knowingly supportive of the
government’s reluctance to overhaul its structure. Some may merely take certain theoretical orthodoxy
for granted or believe that downsizing the government would also reduce its political sway. Others are
likely to have converse political stability concerns or more sinister motives of directly gaining from the
outcomes. In any case, the Iranian government appears overextended due to its limited sources of
revenue, exacerbated by inefficiency and wastefulness. The right course for the government would be
to increase its revenues significantly by revamping its taxation structure—focusing especially on
unproductive activities. Progressive taxation could decrease inequality directly and further allow the
government to adequately address the needs for social services and better support the country’s
development and industrialization drive. This should lead to improvements in the efficiency and
transparency of the governance structure as well, since the government would have to become more
accountable to the public in the process. Needless to say, these are not easy tasks—in particular,
politically.
It has become popular in Iran to indiscriminately attach the neoliberal label to various government
initiatives deemed to lean toward the right. It is true that some seminal theorists of neoliberalism stress
its rapid global spread. But this must be interpreted in terms of the rhetorical use of the neoliberal
discourse in achieving the desired ends by those in power—no matter what the political economic
context happens to be. The pedigree of Iran’s post-revolutionary political establishment can be largely
explored in the right of the political spectrum—among the clergy, their merchant supporters in the
traditional bazaar, and other religious and conservative groups. Their religious principle of “public
guardianship” to provide for those in need (see Messkoub, 2006), particularly by leveraging faith-based
taxes and donations, was further influenced at an early stage by more modern views associated with
the other members of the original revolutionary coalition. To these, one should certainly add the effects
of oil, large-scale revolutionary and clientelistic recruitments from the lower strata of the society, and
four decades of political evolution against the backdrop of extraordinary internal and external
circumstances. Given this mixed background, the implemented policies betray populist statist tendencies
that may appear left-leaning as well as dispositions associated with Iran’s traditional bazar—in many
instances simultaneously.
Of further note is that the 1979 Constitution does not contain any explicit mention of inequality,
despite its social justice aspirations. References to the goal of reducing inequality are however made in
later policy documents, as suggested above. At the same time, the social justice agenda has gradually
minimized its focus on the downtrodden and workers as revolutionary social actors (see Morgana, 2019)
—replacing them with those in need of charity or deprived groups as targets of welfare activities.
Moreover, the so-called turn to the right as related to social policy dates back to the earliest post-
revolutionary years (see Bagheri, 2020)—even before the launch of the First Development Plan in 1989
and the voluntary adoption of a structural adjustment program at the end of the Iran–Iraq War that was
subsequently aborted. The blanket neoliberal labeling is thus less than helpful, since it grossly overlooks
the complexities and nuances of the different areas of public policymaking.6 As expected, developments
in each component and institution of social policy in Iran have been shaped by many factors, conflicting
interests, and reversals. The chapters in this volume aim to shed light on the various institutions and
components of social policy in Iran and to encourage future debate and research in this important, yet
understudied, area.

Overview of chapters
The introductory section above has discussed the context and major challenges of social policy in Iran.
The chapters that follow critically analyze various aspects of the country’s social policy and their
consequences. Given the focus of the volume on the main components and institutions of social policy,
some crosscutting issues are only briefly touched upon.7 Chapter 2, by Pooya Alaedini and Reza Omidi,
probes the evolution of Iran’s social welfare institutions and policy frameworks. It first provides a
discussion of the developments prior to the 1979 Revolution, when the focus of welfare policy was
largely on the provision of social insurance for formal sector employees. The chapter then probes the
diverse welfare activities of the post-revolutionary period. Extending social insurance to additional
groups, over the past four decades, welfare policy has further succeeded in initiating a number of social
assistance programs for the deprived and vulnerable groups in rural and urban areas. The post-
revolutionary welfare activities have been partly carried out by para-governmental bonyads—which are
discussed in some detail. Despite their achievements in improving a number of social indicators over the
years, Iran’s social welfare institutions are found to face significant challenges in terms of efficacy,
sustainability, and consistency.
Chapters 3 and 4 are on Iran’s health policy and public education sector, respectively. In Chapter 3,
Ali Hassanzadeh identifies five policy periods: introduction of a primary healthcare model during the first
post-revolutionary decade based on universal communitarian beliefs; aiming for universal health
insurance during the post-Iran–Iraq War reconstruction period; formulation of a comprehensive system
of welfare and social security system during the reformist Khatami administration; shifts during the
Ahmadinejad administration; and implementation of the Health System Transformation Plan after 2014
under the Rouhani administration. The evolution of policies in the context of emerging health sector
trends are highlighted during these periods, and achievements and challenges are discussed. The
initiatives have succeeded in bringing about nine-tenths of the population under insurance coverage and
have resulted in increases in life expectancy, reduced maternal and child mortality, decreasing burdens
of preventable diseases, and a number of other positive health outcomes. At the same time, the country
is confronted with several direct and indirect health sector challenges, which are discussed in the
chapter. Following a brief discussion of the origins of Iran’s modern education, Chapter 4—by Reza
Omidi and Pooya Alaedini—explains the values and governing principles of the post-revolutionary
education system and the evolution of government policies since 1979. The chapter further investigates
the trends in government expenditure on education before treating education outcomes—including
literacy, enrollment, and quality, as well as privatization. Notwithstanding its achievements over the
years, the education system is found to have shortcomings in all of these domains, while it also suffers
from the impact of ideology and conflicts of interest.
 Iran has 18 pension funds, 4 of which account for most of the market. Only one of the main schemes
remains with adequate liquid financial resources to meet its obligations. Chapter 5, by Hessam
Nikoupour and Narges Akbarpour-Roshan, discusses the origins of Iran’s pension fund woes. This
includes reductions in the support ratio as the funds have matured; increases in early retirements as
well as the number of those insured under the auspices of the government via additional regulations
imposed on the funds; government’s non-payment of its share of contributions and its increasing debts
to the funds; overgenerous rules governing the calculation of benefits; financial mismanagement of the
funds’ resources; labor market shifts as a reflection of the growing shares of the informal economy and
digital jobs as well as the persistence of high rates of inflation and unemployment and low rates of
economic growth; and government’s imposition of certain costly initiatives on the schemes. A number of
options are explored in the chapter to address these challenges. Parametric reforms to be made in the
short term can include increasing the retirement age and years of service requirements, tightening
regulations governing pension entitlements, reforming pension formulas and their associated
parameters, and increasing the contribution rates. A main option for the medium term is to improve the
funds’ governance structures by revising their investment policies, avoiding any new government-
imposed initiatives without due actuarial valuation, and making the government’s debt repayment
mechanism more transparent. Privatization is yet another route, albeit with significant social
consequences.
Chapter 6, by Pooya Alaedini and Fardin Yazdani, discusses the country’s housing policies and
initiatives aimed at low-income and vulnerable groups over the past four decades. Its focus is on urban
areas—given the record of rapid urbanization in Iran as well as the scarcity of serviced land and the
appearance and expansion of informal settlements in many of its cities and towns. The post-
revolutionary Iranian Constitution recognizes the right to housing for every Iranian family. A number of
activities have been carried out in this pursuit. The earlier programs entailing extensive land allocations
by the Iranian government became unsustainable and have been largely abandoned. Affordable housing
policies aimed at low-income groups have nonetheless continued to focus on homeownership. No social
or affordable rental housing initiative has been undertaken in the country—notwithstanding public
housing provided to government employees, a short-lived rent-to-own initiative, and limited housing
assistance activities carried out for vulnerable groups. Yet the housing policies and programs adopted by
the government have largely failed to alleviate housing woes, as prices (including for rental units) have
become increasingly unaffordable for low- and middle-income households.
In Chapter 7, Behrouz Hady Zonooz investigates Iran’s labor market challenges as well as
government policies attempting to tackle them. A stalled population transition and rapid population
growth after the 1979 Revolution brought millions of new entrants into the labor market two decades
later. Notwithstanding the subsequent reduction in fertility rates, the working-age population has
continued to expand, while the low and fluctuating economic growth records alongside the increasing
adoption of labor-saving technologies have reduced the demand for labor. This has led to persistently
high unemployment and low labor force participation rates as well as the expansion of informal
employment and low rates of productivity. The government has confronted these woes by expanding
access to higher education (acting to delay additional entries into the labor market), lowering the
retirement age, and implementing active labor market programs mainly comprising low-interest loans
offered to small and medium enterprises. As these initiatives have been less than successful for a
variety of reasons, the intensification of economic sanctions imposed on the country has further
aggravated Iran’s labor market woes. The chapter provides four sets of recommendations to tackle the
growing challenges: adopting strategic political and economic reforms at the macro-level with respect to
foreign relations, governance structure, and strengthening the market; improving the productive
investment environment by facilitating private sector access to banking credit, removing legal barriers to
online business activities, and adopting industrial and related foreign exchange rate policies; reforming
the labor market institutions, including the social security system and the Labor Code in accordance with
international conventions; and replacing the existing active labor market policies with a set of
coordinated initiatives for the development of competitive enterprises and productive employment, with
an additional focus on addressing regional and sectoral mismatches between labor supply and demand.
In Chapter 8, Davood Souri examines poverty trends in Iran during 2005–2015 and their relationship
to macroeconomic policies. It starts by showing that the share of poor households in the total
population has increased throughout the period. While employment is expected to decrease the
likelihood of poverty, the study indicates that in most cases the heads of the poorest households are
employed. A closer inspection reveals the likelihood of partial employment for these heads of household
in unskilled and low-paying private sector jobs, which are affected by shifting economic circumstances
and policies. The study leverages micro-simulation tools to investigate the impact of economic policies
adopted toward spurring growth and reducing inflation on the poverty rate.

Notes
1. In the absence of official data published routinely by the government,
studies focusing on poverty in Iran have either used international poverty
lines or devised their own local measures (e.g., World Bank, 2018; Majles
Research Center, 2018a, 2018b; Maasoumi and Mahmoudi, 2013; Mahmoudi
(2011); Assadzadeh and Paul, 2004; Souri, 1999). Figures reported in Table
1 are based on World Development Indicators and refer to international
poverty lines. These are useful in capturing the poverty trend over the past
two decades—notwithstanding their shortcomings.
2. Leveraging the 2012 national survey results, multidimensional poverty was
probed in a study conducted at the Ministry of Cooperatives, Labor, and
Social Welfare (MCLSW, 2016). Households were considered
multidimensionally poor when exhibiting deprivation in one-third or more of
the 13 indicators used (health, education, housing, employment, and living
standards). Multidimensional poverty was reported for 17 percent of urban
households and 40 percent of rural households. Furthermore, 22 percent of
urban households and 16 percent of rural households were found to be
under the poverty line, although not considered multidimensionally poor. A
reverse situation was recorded for 6 percent of urban households and 18
percent of rural households.
3. JCPOA was reached in 2015 between Iran and the five permanent members
of the United Nations Security Council plus Germany and the European Union
(not an actual signatory). The agreement was to remove international
sanctions imposed on Iran in exchange for the curtailment of the country’s
nuclear activities. However, the United States under the Trump
administration unilaterally withdrew from the agreement in 2018—with
significant consequences after the resumption and intensification of
sanctions.
4. The middle class has expanded considerably since the 1990s (see
Farzanegan et al., 2021; Alaedini and Ashrafzadeh, 2016). This development,
which has been referred to as a social revolution (Harris, 2017:14), is
arguably a reflection of Iran’s political economy and social policy structure
against the backdrop of persistent inequality. The trend has likely stalled in
the more recent period due to the difficulties faced by the Iranian economy.
5. For example, according to a member of Iran’s Expediency Council, while 70
percent of bank deposits belong to only 1 percent of account holders, their
combined annual interest income equals five times the total value of the
national cash transfer program (IRNA, 2018).
6. Vahabi and Mohajer (2020) argue against the neoliberal label for Iran’s
political economy, since its government does not follow any of the usual
neoliberal recipes—e.g., commandments of the Washington Consensus—
except on expedient occasions or in certain rhetoric.
7. Among these, gender aspects of social policy and labor relations, as well as
rural developments and civil society activities, are certainly worthy of
significant attention in future endeavors.

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2 Development of Iran’s social welfare
institutions
Pooya Alaedini and Reza Omidi
DOI: 10.4324/9781003096757-2

Introduction
This chapter investigates the institutional development of social welfare in modern Iran.
Notwithstanding the modernizing aspirations of the 1905–1911 Constitutional Revolution, the formative
years of welfare policy in Iran date back to the period of institution-building during the 1920s and 1930s
under the first Pahlavi monarch. The next section treats this and two other periods coinciding with the
country’s major political epochs and leading to the 1979 Revolution. Against the background of the
revolutionary slogans and ideals—some enshrined in the Islamic Republic Constitution—a large number
of institutions have been created over the past four decades to expand welfare services and address
various forms of deprivation. The initiatives have been supported by laws and regulations adopted
toward increasing the coverage and comprehensiveness of the welfare activities. The chapter provides a
detailed overview of these developments. It then examines the key active public sector welfare
organizations, including the State Welfare Organization. The activities of the revolutionary par-
governmental organizations are treated in another section. The last section before the chapter’s
concluding remarks discusses the insurance system.

Institution-building prior to 1979

Formative phase (1925–1941)

Many of Iran’s modern institutions were initiated in the early 1920s, which were preceded by a period of
political instability after the Iranian Constitutional Revolution, WWI, and a dynastic change from Qajar to
Pahlavi. They included new industries and infrastructure as well as modern education, healthcare, and
financial systems, all with profound social consequences (see Abrahamian, 1982:135–149). Even the
establishment of a modern military during this period is said to have had significant social implications in
terms of promoting literacy and meritocracy (Messkoub, 2006).
Passed in 1922 by the National Consultative Assembly or Majles, the State Recruitment Law (qanun-e
estekhdami-ye keshvar) addressed such issues as the retirement of state employees and their right to
receive a government pension (Articles 43 and 44). A dedicated institution was subsequently established
in this vein—Fund for Retirement of Employees and Survivors’ Pension (sanduq-e taqaod va vazayef-e
vorras-e mostakhdemin), which was eventually organized as the State Bureau of Retirement (named
edareh-ye taqaod-e keshvari in Persian in 1928 and renamed edareh-ye bazneshastegi-ye keshvar in
1938). Prior to this, the relevant laws passed by the Majles only treated assistance activities (Akbari,
2003:77–79). In 1935, a retirement fund for the armed forces was also created. Iran’s first generation
of social insurance further included the Provident Fund for Road and Transport Workers (sanduq-e
ehtyat-e kargaran-e toroq va shavare’) established in 1930 in connection with the construction of the
Trans-Iranian Railway. It covered medical care for work-related injuries or illness, compensation for loss
of limb or ability to work, and life insurance.1 Yet another important development was the preparation of
Guidelines for Factories and Industrial Establishments (nezamnameh-ye karkhanejat va moassesat-e
san’ati) by the General Bureau of Industries and Mines and its adoption by the cabinet in 1936. This
would bring additional wage earners—whose ranks were growing—under coverage (Peyravian and Jivar,
2002:3–8). Notwithstanding the provident and retirement funds, charity organizations affiliated with the
royal court were also founded in this period. The most important of these was probably the Charity
Organization for Mothers and Infants (bongah-e kheyriyeh-ye madaran va nowzadan), established in
1940 by Princess Fawzia, which benefited from government funding (Akbari, 2003:69).2 These
developments were naturally affected by global trends and the emergence of international institutions.
For example, Iran became a “founder member” of the International Labor Organization (ILO, 1976),
which would influence its welfare activities.
Although calls for the creation of a universal education system were made during the Constitutional
Revolution, its actual initiation dates back to the period under discussion as well. The newly established
system absorbed most of the traditional and non-traditional forms of primary and secondary education.
In this connection, a 12-fold rise in annual allocations for education between 1925 and 1941 rapidly
increased school enrolment (Abrahamian, 1982:144–145). Some limited but consequential health-
related steps were also taken—including the initiation of piped water and sewage projects, construction
of hospitals and clinics, and training of medical specialists. Iran’s Red Lion and Sun Society was officially
established in 1922 (renamed Red Crescent Society after the 1979 Revolution) and admitted to the
international movement in 1923. Its origins however appear to date back to 1906 (see Ghassemlou,
2016).

Between occupation and coup (1941–1953)

The above trends were disrupted when WWII Allied forces occupied Iran in 1941. The ensuing chaos
and misery notwithstanding, the abdication of Reza Shah in favor of the Crown Prince suddenly changed
the country’s political atmosphere. The Tudeh Party (subsequently becoming Iran’s main Soviet-backed
communist organization) was swiftly established and gained significant influence by the mid-1940s (see
Abrahamian, 2008:108–113). The Tudeh Party not only gained seats in the parliament but also
succeeded in joining Premier Ahmad Qavam’s coalition cabinet formed in 1945. The coalition
government was thus mandated with a wide range of social programs—distribution of state
landholdings, women’s suffrage, decentralization of the governance system, and employment generation
as well as building schools, health and medical facilities, and rural irrigation networks (see Messkoub,
2006). Other important initiatives included the official recognition of labor unions affiliated with the
Tudeh Party, formation of the High Council of Labor (shura-ye ali-ye kar) to implement an
unemployment insurance program, formulation of some wage standards, and establishment of certain
committees to mediate between workers and employers (Ibid.). The Labor Code was approved by the
cabinet in 1946, granting some rights to employees on working conditions, minimum wages, labor union
activities, health, and safety as well as the creation of special funds concerning unemployment, health,
and cooperatives (Karimi, 2005:38). The Rural Cooperatives Fund was further established by the
government toward addressing the needs of those with disabilities, orphans, and ailing individuals not
affording treatment alongside establishing social insurance, pre- and primary schools, hospitals,
pharmacies, and a corps of mobile physicians in the countryside. Its activities were to be financed from
the profits of landholders as well as owners of cattle, groves, and mills (Akbari, 2004:50–52). The Social
Services Association (subsequently sazman-e shahanshahi-ye khadamat-e ejtemai or Royal Social
Services Organization) was created in 1946 under the auspices of the royal court to provide health and
medical assistance to indigent individuals (Ibid, p. 121). More importantly, the bylaws of the Social
Welfare Corporation (bongah-e refah-e ejtemai), targeting establishments subject to the Labor Code,
were adopted in 1947 (Ibid, p. 54).
This was a period of significant political activity in Iran. Besides the Tudeh Party drawing support
from the intelligentsia and workers, the National Front of Iran was led by Mohammad Mosaddeq as a
democratic and patriotic coalition of parties or individuals largely representing the educated middle
classes and the petty bourgeoisie. Leftist and center left aspirations associated with these two political
movements influenced the government’s welfare policy. For example, Article 39 of the Law on Mayoral
Administrations and Municipal and Village Councils, passed in the Summer of 1949, included a number
of social services among the duties of the mayoral administrations (shahrdari): tending to the health
and well-being of residents, establishing soup kitchens (navankhaneh), nurseries, and orphanages, and
engaging street beggars in employment (Akbari, 2004, 58–59). Furthermore, the Fund for Workers’
Cooperatives and Insurance (sanduq-e taavon va bimeh-ye kargaran), which entailed compulsory
coverage of workers and their families as well as non-work-related benefits (Panahi, 2006:22), created
the first model of social insurance in the country.
 With Dr. Mosaddeq assuming the premiership in the Spring of 1951, workers unions were
reinvigorated—which was accompanied by calls for wage increases and the expansion of social
programs. In response, the government reduced the military and court budgets and brought royal
charity organizations under its control (see Abrahamian, 2008:117–118). It further formulated a number
of social assistance and insurance policies. One important initiative was the Development and
Cooperatives Fund for Villages, Rural Districts, and Rural Administrative Seats (sanduq-e omran va
taavon-e deh, dehestan va bakhsh). Landholders were to contribute 10 percent of the income from their
properties (bahreh-ye malekaneh) to this fund (Karimi, 2005:40). The fund was to be leveraged under
the supervision of local councils for various social programs in rural areas, particularly inexpensive
housing, health services (including the employment of mobile teams of physicians), and addressing the
needs of orphans, the elderly, and ailing individuals lacking support.
The Municipalities Law was revised and approved as layeheh-ye qanuni-ye shahrdari by the
government in the Fall of 1952. It extended the earlier duties of the mayoral administrations to include
low-cost housing plans for indigent residents (Akbari, 2004:59). The government additionally approved
the creation of a commission funded through gasoline taxes to provide assistance for impoverished
individuals—including food, clothing, and means of employment as well as warm houses (Akbari,
2004:60–61). Yet an important achievement of the Mosaddeq administration was the 1953 Law of
Workers’ Insurance. It mandated the extension of compulsory insurance—now centralized under the
Workers’ Insurance Organization—to all employees covered by the Labor Code and established the legal
means for its funding (Peyravian and Jivar, 2002:77).

Oil-based industrialization and welfare policy development (1953–

1979)
Mosaddeq’s government was removed from power in August 1953 through a royalist coup backed by
American and British intelligence agencies. Yet, continued political struggle and the need for post-coup
regime legitimacy created the grounds for a series of reforms and social programs (see Katouzian,
1981:188–233; PO, 1962:19; Ghaffari and Omidi, 2008:137). Significant among these were the White
Revolution and especially the rural land reforms—put to referendum in early 1963. The state
bureaucracy suffered from significant deficiencies (see McLeod, 1964:240–241). Yet, increasing oil
revenues at the disposal of the government removed earlier financial obstacles to rapid investment in
infrastructure, modern manufacturing, and agricultural machinery as well as imports of consumer,
intermediate, and capital goods (see PO, 1961:3; Karshenas, 1990:88–108). These allowed for relatively
rapid industrialization alongside significant changes in Iranian society. While independent worker
movements were suppressed, a large number of government-sanctioned labor unions were created
starting in the early 1960s. Iran Workers Organization (sazman-e kargaran-e Iran) was further
established in 1967 as an umbrella institution for the unions. The Labor Ministry was renamed the
Ministry of Labor and Social Affairs in 1963 to reflect its new duties. These included labor training,
coordination of social services, and the establishment of a number of relevant institutions—e.g., the
Rehabilitation Association (anjoman-e tavanbakhshi) in 1968 and the Fund for Education of Workers’
Children (sanduq-e ta’min-e amuzesh-e farzandan-e kargaran) in 1972 (Akbari, 2004:91, 98). In
association with rural land reforms, the Law on Rural Social Insurance was adopted in the Spring of
1969 (Majles, 17th Parliament, Session 128) covering work-related accidents, illness, inability to work,
and death. Other important institutions created in this period included State Administrative and
Recruitment Organization (sazman-e omur-e edari va estekhdami-e keshvar) established in 1966; a
medical services organization for the families of the armed forces created in 1972; Retirement and
Pension Fund for Employees of Government-owned Companies (sanduq-e bazneshastegi va vazifeh-ye
mostakhdemin-e sherkatha-ye dowlati) founded in 1972; and a similar fund for the retirement of
permanent municipal employees initiated in 1974 (Akbari, 2004). Established in 1958 as a royal charity
organization, the Pahlavi Foundation subsequently became a player in the provision of social services in
the country as well (see Abrahamian, 2008:127).
The Iranian government could further induce large industrial establishments to pay increasing
attention to the welfare of their employees, by expanding the coverage of social insurance and
mandatory profit-sharing, among other things (see Ashraf, 2010:58). In the pre-revolutionary Fourth
Development Plan (for the period 1968–1972), a separate chapter was dedicated to social welfare for
the first time. According to the plan, the goal was

to gradually reorganize all current welfare activities in their limited charity

forms under government supervision as public sector responsibility and
simultaneously coordinate the welfare services of various public, social, and
private organizations so that access to minimum services and enjoyment of
social rights become possible for all.
(PO, 1968:99)

The Supreme Council of Social Welfare was formed to coordinate these activities.
Yet, inequalities were in fact increasing due to the country’s lopsided development (Pesaran, 1976;
Vafayi, 1976), reflected in major shortcomings associated with education, health, housing, and social
security as well as urbanization and environmental protection. These issues thus became the major foci
of the pre-revolutionary Fifth Development Plan (for the period 1973–1977)—which earmarked 30
percent of its financial resources for social affairs. Focusing on certain regions and population groups,
the provision of social services was prioritized in the plan based on three criteria: level of income
(priority given to the rural and urban areas left behind in the development process as well as basic
laborers); importance of the social group (priority given to children and teachers); and vulnerability and
incapacity (priority given to those suffering from physical, mental, or social disabilities) (PBO,
1972:796).
Notwithstanding institutional and capability shortcomings—as expressed during a major seminar held
in 1974 (PBO, 1974a, 1974b)—the oil price hike of the early 1970s permitted the government to
drastically expand the scope of its economic and social programs. The Fifth Development Plan was
revised in 1974, doubling its total financial resources and significantly raising government expenditures
allocated to education, health, and other social services. The law for the creation of a Ministry of Social
Welfare was passed in the Summer of 1974. According to its first article, the new ministry would be
tasked with the provision of universal medical insurance, social security (insurance and non-insurance
social protection), welfare services for various age groups and families, and rehabilitation services as
well as supervision over non-governmental welfare institutions, treatment of substance abuse,
collaboration with international organizations, and implementation of various programs approved by the
Supreme Council of Social Welfare. In early 1975, the Ministry sought and secured the approval of the
Majles for the creation of two new institutions: Social Security Organization and Welfare Services
Organization focusing on social assistance. Defending the latter in front of the Majles (23rd Parliament,
Session 208), the Minister of Social Welfare Shojaeddin Sheikholeslamzadeh stated:

[U]ntil various insurance modalities cover all citizens of the country, the
mission of the Ministry of Social Welfare is to provide assistance to those
among our compatriots who due to illness, inability to work or other
reasons can no longer meet part or all of their living expenses or have other
material or non-material needs.
The Social Security Organization was established in the Summer of 1975 by merging the Social
Insurance Organization (sazman-e bimeha-ye ejtamai) and the Rural Social Insurance Organization
(sazman-e bimeha-ye ejtemai-ye rustaiyan) and placing it under the Ministry of Social Welfare.
According to Article 4 of the Social Security Law (Majles, 1975) creating the Social Security
Organization, the new institution’s beneficiaries would be wage and salary earners, business owners,
and pensioners (retirees or those receiving workman’s compensation). Furthermore, the law mandated
the government (alongside the insured person and the employer) to cover part of the insurance
premiums.
The Ministry of Social Welfare was soon merged with the Ministry of Health to create the Ministry of
Health and Welfare (vezarat-e behdari va behzisti) in 1976, apparently as a way to address bureaucratic
conflicts between the former two. In his opening remarks for the Second Seminar on Social Welfare held
in the Spring of 1976, Shojaeddin Sheikholesamzadeh, now the Minister of Health and Welfare, stated:

As [the Ministry of Social Welfare] began its work, two sets of realities
gradually emerged: First, welfare services and medical and health services
have a very close relation, and providing them separately would not be
logical or cost-effective from the perspective of either the service provider
or the beneficiary. The second reality has to do with the manner of
decision-making and management. With the ever-increasing number of
social welfare programs and the speedy expansion of the social security
coverage, it gradually became clear for our executives and specialists that
the existing centralized system with its Tehrani bureaucratic characteristics
would in itself be a significant hurdle to work progress.
(PBO, 1976a:7)

The seminar concluded with two sets of related recommendations. The first was to broaden the focus of
the activities—in terms of both content and targeting (PBO, 1976a:1). The second recommendation was
to develop a comprehensive plan for a system of service provision that could be expanded over time
within the country’s development framework (PBO, 1976b:27).
The above goals were incorporated in the pre-revolutionary Sixth Development Plan (for the period
1978–1982), which stressed the improvement of welfare rather than economic growth, especially for the
benefit of those with the lowest incomes and lacking social security (PBO, 1977:238). Accordingly, 18 of
the 36 committees formed to draft the plan dealt with various social and welfare issues—including
macro and cross-sectoral committees (e.g., the quality-of-life committee and the development and social
welfare committee) as well as committees dealing with specific social issues (e.g., housing, education,
and health). However, the Sixth Development Plan was never implemented, as revolutionary waves
swept the country and removed the regime from power in February 1979.

Major social welfare developments after the revolution

Some of the more important institutional developments with respect to welfare policy after the 1979
Revolution are explained in this section. Descriptions of the activities of the existing organizations—both
public and para-governmental—are provided in the next sections. Social justice aspirations played a key
role in the 1979 Revolution. Accordingly, various parts of Articles 21, 29, 30, 31, and 43, as well as
Article 3 of the Islamic Republic Constitution, treat the welfare rights of Iranian citizens.3 Based on
these, a number of initiatives were carried out in the immediate post-revolutionary period to extend the
service coverage of the existing organizations, but, more importantly, to create new revolutionary para-
governmental organizations (foundations) for addressing the plight of the downtrodden. At the same
time, the government’s central role in ensuring social justice and overseeing the welfare programs was
emphasized—especially in the areas of health and education (Office of Prime Minister, 1980). It was
believed that without the central role of the government, national resources would be used to further
the interests of private actors rather than development (PBO, 1980:4). Since the newly created para-
governmental organizations were treated as part of the new revolutionary political system, the
expansion of their activities was not seen as infringing on the role of the government. Yet the informal
activities of some revolutionary institutions, as well as overlaps between their responsibilities and those
of the existing public sector organizations, would eventually lead to their formalization or merger. For
example, the Construction Jihad—a volunteer corps created in June 1979 by order of Ayatollah Khomeini
to carry out development activities in rural and deprived areas—became the Ministry of Construction
Jihad in 1983 and was then merged with the Ministry of Agriculture to form the Ministry of Agricultural
Jihad in 2001.
During the Iran–Iraq War, the government created a vast rationing system for food and other basic
necessities in addition to its price controls. The revolutionary political system further advocated austere
living and sacrifice. Income inequality decreased significantly relative to its height during the last pre-
revolutionary years—given the elimination of many top income individuals through asset confiscation as
well as structural shifts and the wartime economic downturn. Yet, by the end of the war, government
policy began to de-emphasize some of the earlier social justice slogans. For example, in the post-
revolutionary First Development Plan (covering the reconstruction period after the end of the Iran–Iraq
War), distribution was declared subordinate to increasing the national income (Majles, 1990). A major
desire was to address the country’s balance of payment challenges and budget deficits. A structural
adjustment initiative was voluntarily adopted aiming at government downsizing, removal of price
controls, a floating exchange rate, privatization, reduction of import tariffs, and related monetary
policies. The assumption was that these policies would result in rapid growth, in turn benefiting the
larger society through a trickledown effect (PBO, 1997). Welfare organizations were expected to
increase their reliance on their own finances. This economic policy framework continued under the post-
revolutionary Second Development Plan (for the period 1995–1999). While some economic growth was
realized as a result, the grossly inadequate social support, partly due to the inefficient bureaucratic
system, gave rise to urban riots and eventually the decision to discontinue the structural adjustment
program (Mashayekhi, 1998:66). The shift also had to do with the runaway inflation and foreign
currency shortages.
No discernable welfare strategy was defined prior to the post-revolutionary Third Development Plan.
However, there continued to be plenty of disparate welfare-related activities (Madani Ghahfarokhi,
2000:88). This said, the government initiated a well-coordinated primary healthcare program in the mid-
1980s, which established health houses in the country’s scattered villages. The initiative would become
highly successful in providing basic health and family planning services to rural residents—resulting in
significant reductions in fertility rates (Salehi‐Isfahani et al., 2010). Most other activities, however, while
improving some social indicators, were plagued by the absence of an overarching policy framework or
coordination mechanism. They also lacked comprehensiveness and inclusiveness and suffered from
underdeveloped delivery structures and shortfalls in terms of human capital, managerial know-how, and
financial soundness. Whereas extending protection was the main focus of the government in the 1980s,
social insurance received increasing attention during the 1990s. Article 40 of the post-revolutionary
Third Development Plan (Majles, 2000) envisaged the creation of an appropriate structure for the social
security system, emphasizing social insurance. Furthermore, there were calls for reducing and
streamlining the large volume of subsidies.
The creation of a comprehensive welfare system was firmly initiated following discussions held
between President Mohammad Khatami and members of the High Council of Insurance in the Spring of
1998.4 However, it took another six years before the Law on Structure of Comprehensive Welfare and
Social Security System (CWSS) was enacted by the Majles (2004)—which created the Ministry of Welfare
and Social Security (MWSS) as well as the High Council of Welfare and Social Security. The formulation
and adoption of the CWSS law were viewed as a long-debated response to social problems, poverty, and
unemployment against the background of the overemphasized (and unrealized) economic growth goals.
According to the first Minister of Welfare and Social Security Mohammad Hossein Sharifzadegan (2016),
the CWSS law embodied the culmination of more than a century of welfare aspirations and endeavors
against the background of Iran’s religious and traditional cooperative mores. Mohammad Sattarifar
(2002), director of the Management and Planning Organization (MPO)5 between 2001 and 2004,
enumerated the following requirements in relation to a desirable comprehensive welfare system at the
time: clearly delineating responsibilities; expanding competitive insurance options and better managing
incomes and expenditures of insurance funds; enhancing protection coverage and effectiveness of
subsidies; extending relief coverage; creating a cohesive framework for macro and strategic policies;
streamlining insurance, protection, and relief activities through improved structural coordination and
reduced overlaps; establishing a comprehensive data bank; ensuring inclusiveness and
comprehensiveness; increasing operational and economic efficiency of insurance, protection, and relief
initiatives; and periodically reassessing all aspects of the issues and challenges faced by the welfare and
social security programs.
The 19 articles of the CWSS law across three sections reflect most of the above requirements.
Invoking Article 29 of the Constitution, the first article declares the law’s purpose as giving cohesion to
welfare policies toward nurturing social justice and protecting all citizens against adverse social or
natural events and their consequences. The law delineates the country’s general policies in the areas of
insurance, protection and rehabilitation, and relief. It mandates MWSS as well as the High Council of
Welfare and Social Security to carry out welfare policy coordination in the areas of education,
employment, health, and various forms of social security as well as to formulate public budgets for
insurance, protection, and relief, manage social subsidies, monitor welfare and social security programs,
create a comprehensive data bank, and review and revise the statutes of all relevant governmental
organizations, funds, and other public institutions.6 These would theoretically give MWSS nearly full
responsibility for planning and budgeting in the realm of social policy. Yet this responsibly would bring it
into antagonism with MPO, despite the latter’s earlier role in establishing MWSS. Notwithstanding the
perceived conflict of authority in terms of budgeting and planning, the establishment of a new ministry
somewhat defied general downsizing policies of the Third Development Plan as pursued at MPO. MPO’s
traditional emphasis on economic development in terms of physical output might have also played a role
in its less-than-cooperative relations with MWSS (Vaez-Mahdavi, 2013).
The Ministry of Health and Medical Education (MOHME) opposed the transfer of Iran Health
Insurance Organization (IHIO) and the secretariat of the High Council of Health Insurance to MWSS.
Various critics also argued against the formation of a new ministry but in favor of more coordination.
MWSS appears to have faced a host of challenges stemming from the different legitimating sources of
welfare and social security institutions, conflict of interest among agencies, incongruity of the ministry’s
objectives with the prevailing political economy paradigm, inadequate technical know-how, and unease
on the part of the long-established agencies. These all meant that MWSS’s dissolution was contemplated
shortly after it was established, and the matter was discussed in the Majles as early as 2006. MWSS was
finally merged with two other ministries in 2011 based on Article 53 of the Fifth Development Plan
(Majles, 2011)—which called for the reduction of the number of ministries from 21 to 17—to create the
Ministry of Cooperatives, Labor, and Social Welfare. Given the existence of numerous expert voices
within and outside the government that endorsed MWSS, the merger may be speculated to have been
more political than technical. Furthermore, as the Sixth Development Plan was being prepared during
President Hassan Rouhani’s first term in office, MOHME succeeded in taking back Iran Health Insurance
Organization and the secretariat for High Council of Health Insurance—as approved by the High Council
of Administration (see Chapter 3).
Several programs with potentially significant welfare implications were initiated during the populist
tenure of President Mahmoud Ahmadinejad.7 Among these, Mehr Housing is treated in detail in another
chapter in this volume. The cash transfer or cash subsidy (yaraneh-ye naqdi) program was originally not
formulated as a welfare activity. It was rather carried out in association with a reform initiative—based
on the Subsidies Reform Act (Majles, 2010)—that aimed to reduce the significant gap between domestic
and international energy prices. A large chunk of government subsidies—including indirect energy-
related subsidies—had long been seen as not only too costly but also benefiting the rich much more
than the poor (Guillaume et al., 2011). The cash transfer program was meant to both address part of
these issues and compensate low-income groups for the rise in the prices of consumer petroleum
products, electricity, and water as a result of the reform. The program initially transferred cash to the
account of (the head of) every registered household in the country commensurate with its size. While
funds released from the energy subsidy reform turned out to be smaller than the cost of the cash
transfer program, financing the shortfall was not without inflationary effects. There have been attempts
during the Rouhani administration to reform the cash transfer scheme and possibly turn it into a poverty
alleviation program (see Meydari and Hashemkhani, 2013). The only achievement so far has been to
eliminate the beneficiaries in the supposedly highest income decile, as most Iranian households
continue to receive the stipends. Yet, the real value of the cash transfers has been reduced substantially
due to inflation (see Enami and Lustig, 2018). This means that while the program—which amounted to
12 percent of the GDP when initiated in 2010—weighs less heavily on government coffers, it also has
lost most of its earlier poverty reduction effects (Messkoub, 2019).8 Another seemingly important
initiative dating back to this period is the Justice Shares (saham-e edalat). Pursuing “relative economic
justice” and a “balanced wealth distribution,” the scheme was initiated in 2006 as part of the
government’s privatization program to transfer state-owned company stocks to the poor, lower-income
individuals, and public employees. The impact of this initiative is not clear, as the shares could not be
traded until very recently (Financial Tribune, 2020).
A number of other initiatives falling within the realm of social welfare policy have been carried out in
Iran over the past decades—with many never advancing beyond the pilot stage. Yet, some have been
more significant, although they are also struggling to scale up. For example, several microcredit and
microfinance schemes have been operating in the country. The most important among these appears to
be TAK (2020), initiated under the auspices of the International Fund for Agricultural Development
together with the country’s Agricultural Bank and additionally supported by the State Welfare
Organization. More importantly, the government has embraced an enabling and upgrading approach to
urban informal settlements since the early 1980s, with an implied urban poverty reduction goal. A
national document, Strategies for Enabling and Regularizing Informal Settlements (UDRO, 2004), was
adopted for this purpose, and the Urban Upgrading and Housing Reform Project was formulated and
implemented in the period 2004–2009 with the assistance of the World Bank (2004). The program
piloted a set of physical upgrading, capacity-building, and community-based social projects in the
informal settlements of five cities. Since then, similar activities have been carried out in several other
Iranian cities. National, provincial, and county enabling taskforces have been further established to
coordinate the projects among public agencies. While a new regeneration framework has been created
for these activities (Alaedini and Fardanesh, 2014), their institutional and operational shortcomings have
not been adequately ironed out. Nor is the future of slum regeneration activities clear in terms of
becoming a national program. In the meantime, informal settlements and other types of slum continue
to proliferate in and around Iran’s cities as a reflection of urban poverty.

Key public sector welfare organizations

Most of Iran’s public social welfare institutions are currently affiliated with the Ministry of Cooperatives,
Labor, and Social Welfare (MCLSW). The ministry’s organizational chart, showing its complex structure,
is provided in the Appendix. Many of the activities associated with the pre-merger Ministry of Welfare
and Social Security are now the responsibility of MCLSW’s Deputy Minister for Social Welfare. Yet the
secretariats of the High Council of Welfare and Social Security, High Council of Labor, High Council of
Employment, High Council of Technical Protection, and High Council of Aging are directly affiliated with
the Office of the Minister.9 The same applies to the activities of the State Welfare Organization, the
Social Security Organization, and some other institutions. The State Welfare Organization is discussed in
some detail at the end of this section, while social insurance is treated in another section.
Based on the CWSS law and given the aforementioned merger, the administration of the Deputy
Minister for Social Welfare (ADMSS) should be responsible for managing Iran’s welfare subsidies.
However, the Targeted Subsidies Organization—originally under the Ministry of Economic Affairs and
Finance and subsequently transferred to PBO—has run the country’s unconditional cash transfer
program since its inception. This said, ADMSS manages the program’s database, which is still being
developed. As a major initiative created under MCLSW, the Comprehensive Iranian Welfare Database
(CIWD) is meant to contain data on income, asset, insurance, subsidies, and taxes, as well as some
other information for more than 22 million Iranian households. Beyond the cash transfer program, it has
been leveraged for other welfare programs—e.g., supporting patients with special diseases. A related
endeavor undertaken by ADMSS has entailed coordination among the main welfare organizations—in
particular between the State Welfare Organization and the Imam Khomeini Relief Foundation—toward a
unified service delivery procedure. In this context, an initiative has been undertaken since 2017 to
increase the beneficiary stipends of the two mentioned organizations to 20–70 percent of the minimum
wage commensurate with household size (and to ultimately include some other uncovered low-income
households in the program). ADMSS is also responsible for a food initiative, dating back to 2013, which
is now conducted as a food-stamp program covering 11 million households in three-month intervals.
ADMSS has five bureaus: (i) social welfare research; (ii) social pathologies; (iii) social insurance; (iv)
health insurance; and (v) protection and empowerment. However, the mandates of some of these
bureaus have become quite limited due to the recent administrative changes. In particular, the transfer
of the Iran Health Insurance Organization to MOHME has shrunk the responsibilities of the Bureau for
Health Insurance. Similarly, with the establishment of the Social Affairs Organization (of which more
later), the activities of the Social Pathologies Bureau have been reduced. The bureau was tasked earlier
with addressing the relatively significant issue of primary-level out-of-school children. In this initiative,
the database of the National Organization for Civil Registration was compared with that of the education
system to identify the children in the relevant age group who are not attending school. Information from
CIWD was then used to probe each child’s background—mostly revealing poverty-stricken or disabled
parents or lack of access to school—and to make contact with his/her family. Targeting these children
and their families, a conditional cash transfer scheme was subsequently initiated to reward school
attendance and mitigate dropouts. In the recent period, a main activity of the Social Insurance Bureau
has comprised an insurance initiative—also relying on CIWD—targeting construction workers.
Furthermore, some guidelines of its draft initiative on the creation of a three-tier social security system
—basic, complementary, and voluntary—are currently under review. The bureau has also been working
on a draft universal insurance bill. Some of the major policy studies carried out under ADMSS have
focused on poverty alongside the challenges of the existing insurance system and pension funds. Finally,
ADMSS has been striving in the recent period to systemically evaluate the effectiveness of various
welfare programs in the country—apparently starting with just a few activities.
Yet, one important welfare-related organization created relatively recently is outside MCLSW: Social
Affairs Organization (SAO), established as part of the Interior Ministry after approval by the High
Administrative Council in 2016. SAO houses the secretariat of the State Social Council created by an act
of the Government Cabinet (2001) for policy coordination on addressing social issues and pathologies. It
is headed by a deputy minister, who acts as the secretary of the council (SAO, 2019). Its four bureaus
deal with prevention and control of social pathologies, social development and social capital, social
participation, and social assessment and evaluation. SAO’s mandate has been reinvigorated by the
Supreme Leader’s call for the reduction of five social pathologies associated with addiction, divorce,
slum proliferation, urban crisis zones, and moral depravity. It has carried out a number of large-scale
social surveys; supported the State Welfare Organization, the Imam Khomeini Relief Foundation, and
the Ministry of Education; and prepared guidelines on social safeguards for government projects.
Notwithstanding its focus on policymaking, SAO can muster significant implementation capacity through
the Interior Ministry’s structure, reaching the lowest levels of administration in Iran. In this vein, it has
established more than 200 local facilitation offices for social development in urban slums.10

State Welfare Organization

The State Welfare Organization (SWO) came into existence in the Summer of 1980 when 16 pre-
revolutionary governmental and non-governmental agencies were merged (SWO, 2014a).11 According
to its statute (SWO, 2014b), the organization was formed based on Articles 21 and 29 of the Islamic
Republic Constitution. SWO was originally affiliated with MOHME. Based on the CWSS law, it was
subsequently transferred to the Ministry of Welfare and Social Security. Since the merger of 2011, SWO
has become subordinate to the Ministry of Cooperatives, Labor, and Social Welfare. SWO’s mandate
includes a wide range of social services—prevention, protection, empowerment, and rehabilitative
intervention—for low-income female-headed households, the elderly, orphans and children in need,
individuals with physical or psychological disabilities, and other vulnerable groups. A number of training
centers are affiliated with SWO, including the University of Welfare and Rehabilitation Sciences (2020),
which is nonetheless supervised as an institute of higher education by the MOHME.
Its administrative departments notwithstanding, SWO’s activities have the following organizational
structures (SWO, 2019). Department of Rehabilitation, headed by a deputy director, oversees the work
of the rehabilitation centers and activities aimed at those with physical or mental disabilities as well as
the elderly (in nursing homes or home care). Another deputy-level department of SWO, for cultural and
social affairs, oversees services to families and women in need of assistance (focusing especially on
female heads of household), children and adolescents requiring support, and those suffering from social
harms. The organization’s Development Center for Prevention and Treatment of Substance Abuse,
headed similarly by a deputy director, is tasked with preventing social harms and addiction as well as
disability and with providing counseling services. It also has an office for HIV/AIDS. Four secretariats are
organized under SWO’s Bureau for Public Participation—associated with the Council of Public
Participation, Taskforce on Marriage and Housing, employment and entrepreneurship activities, and
development of non-governmental centers and organizations. Tables 2.1 and 2.2 summarize SWO’s
activities in the recent period. Table 2.1 sheds light on the centers and major programs associated with
SWO. The information in Table 2.2 on SWO’s key activities as mandated by the Sixth Development Plan
is taken from the organization’s recent performance report. SWO has carried out these activities in
cooperation with other state agencies, revolutionary foundations, charities and non-governmental
organizations (which it officially registers), and/or individual volunteers.12

Table 2.1 Centers and Programs Associated with State Welfare Organization in
Fiscal Year 2018–2019
Governmental and non-governmental centers providing social services Foster care Number of centers 663
Number of children 26,182
Various social, counseling, and emergency services for families, women, girls, Number of centers 1,731
adolescents/children, and transgender individuals
Number of beneficiaries 881,818
Childcare Number of centers 15,116
Number of children 666,724
Governmental and non-governmental day centers, skills training activities, and Skills training Number of centers 355
supported production workshops
Number of beneficiaries 13,216
Supported production workshops Number of workshops 113
Number of beneficiaries 4,188
Physical, mental, and behavioral rehabilitation services (including services for Number of centers 826
the elderly)
Number of beneficiaries 26,485
Governmental and non-governmental 24-hour centers and home care 24-hour centers providing services to the physically, Number of centers 513
mentally, or psychologically disabled
Number of beneficiaries 35,540
Centers providing home-care services for the physically, mentally, or Number of centers 259
psychologically disabled
Number of beneficiaries 13,712
Nursing homes Number of homes 304
Number of beneficiaries 15,291
Centers providing home-care services for the elderly Number of centers 105
Number of beneficiaries 4,418
Stipend program for families Under SWO’s social and cultural deputy Number of 267,357
beneficiaries
Under SWO’s rehabilitation deputy Number of 810,453
beneficiaries

Source: SCI (2019:575–582)

Table 2.2 Summary of State Welfare Organization’s Key Activities Mandated by

Sixth Development Plan
Fiscal year 2018– Fiscal year 2019–
2019 2020
Employment for beneficiaries of welfare institutions (persons) 56,326 57,872
Social and supported housing provided to those in need (units) 10,244 14,721
Number of substance abuse cases supported (persons) 718,661 749,811
Number of supported elderly (persons) 260,680 320,000
Source: SWO (2020:11)
 Fiscal year 2018– Fiscal year 2019–
2019 2020
Number of children supported by the food program (persons) 227,560 194,439
College tuition paid for students covered by welfare institutions 32,562 32,000
(persons)
Number of orphan children supported (persons) 23,627 26,554
Rehabilitation services provided in rural areas (persons) 383,168 406,490
Rehabilitation services provided in urban areas (persons) 13,530 41,000
Supply of rehabilitation equipment for those covered by welfare 44,729 71,857
institutions (units)
Social insurance for those covered by welfare institutions (credit in 51,005 50,659
rials)
Divorce prevention services (number of cases) 225,498 N/A
Support for street children (number of cases) 8,619 8,030
Optometric screening for children (persons) 3,444,694 3,378,601
Audiometric screening for children (persons) 1,217,304 1,102,961

Source: SWO (2020:11)

Revolutionary para-governmental organizations (bonyads)

Ayatollah Ruhollah Khomeini (1993a:124) issued an order to the Supreme Revolutionary Council on
February 28, 1979, for the confiscation of assets associated with the deposed royal family and those
affiliated with them. The proceeds would then be deposited in a specific bank account to be used on
various welfare initiatives for the benefit of the poor and deprived—with significant impacts on the
country’s welfare policy structure. As these resources did not belong to the government (the decree
called them ghanimat or spoils), several revolutionary para-governmental bonyads or foundations were
created to leverage them toward their intended activities.13 The creation of bonyads also reflected a
lack of trust in the governmental institutions inherited from the previous regime to deal with the
economic aspects of religious obligations (Saeidi, 2009). The foundations subsequently embarked on
creating a network of welfare support beyond the regular (as well as traditional) system—especially
given the void caused by the collapse of the previous regime. They have continued to act as an
extension of the government bureaucracy (see Shakoori, 2011:253–254). Their activities alongside
those of government agencies have thus constituted a prominent feature of Iran’s welfare system. The
circumstances have been called a dual welfare regime, which exhibits fragmented and overlapping
service provision (Harris, 2017a:15).
Supervision over the revolutionary para-governmental organizations is vested in the office of the
Supreme Leader. Bonyads may enjoy certain exemptions from taxes and duties, while some of them are
recipients of public budget allocations. Despite their extended bureaucratic systems, they have
remained both more stable in terms of management and more flexible in their operations as compared
to government agencies. As bonyads provide a number of advocacy and ideological activities alongside
the provision of social services, they are said to strengthen the relationship between the public and the
religious establishment (Messkoub, 2006). They have thus been cast as a means of patronage and
control (Dorraj and Dodson, 2009) or soft power projection (Jenkins, 2016), although they do not
appear to have formed direct clientelist structures (Harris, 2017b). Bonyads have been criticized for their
lack of transparency and accountability (Saeidi, 2004). They have been further disparaged for their
engagement in large-scale commercial activities (the extent of which is sometimes exaggerated) and
their rapport with the political system for establishing monopolies. Bonyads have also exhibited an
upper hand in taking over government-owned companies in the country’s privatization program. With
their semiautonomous status, they are thus said to act as both a means of distribution separate from
the executive branch and a source of pressure on the government toward privatization (Maloney, 2000).
Yet Selehi Esfahani (2005) points out that bonyads are not very different from the autonomous public
agencies found elsewhere in the world—which are often associated or backed by the office of the head
of state (e.g., monarch) rather than the executive branch. His study further shows that the Imam
Khomeini Relief Foundation (IKRF) has performed better than the State Welfare Organization (a
government agency) through certain periods and events—given the specific political and institutional
context of Iran. However, the choice of bonyad in any comparison is important. IKRF along with the
Foundation of Martyrs and Veterans Affairs is a regular recipient of public budget allocations for specific
and planned tasks, which it has been performing. The other bonyads are expected to use the proceeds
from their assets and commercial operations for welfare activities, which in practice have remained
rather limited. Thus, IKRF is comparable with the agencies directly controlled by the executive branch—
including in its level of transparency and efficiency or ideological intentions. Furthermore, whether or
not bonyads reinforce the dual structure of power in the country’s political economy (Saeidi, 2004)
appears to be a separate issue, as some government agencies may also be controlled by different
political factions and perform duplicate activities. At the same time, one can question the viability and
efficiency of the bonyad model in which the proceeds from their assets and commercial activities are
expected to be leveraged for the provision of services.
This section discusses the Mostazafan Foundation (including the Alavi Foundation), Foundation of
Martyrs and Veterans Affairs (together with the 15 Khordad Foundation), and Imam Khomeini Relief
Foundation as well as the Execution of Imam Khomeini’s Order and its Barakat Foundation. As there is a
separate chapter on housing in this volume, the more specialized Housing Foundation is not treated
here. Of further note is that a number of charities and religious foundations with different pedigrees—
including Astan-e Qods-e Razavi and others active under the auspices of some high-level clergy—as well
as the Endowments and Charity Affairs Organization have carried out welfare activities not dissimilar to
those of the revolutionary bonyads. Although important in their own right, these are also left out for the
sake of brevity given their disparate and ad hoc activities.
Established in March 1979, the Mostazafan Foundation was tasked with improving the living
conditions of the downtrodden, especially in terms of housing (Majles, 1980). Its social justice goal has
been interpreted as monetary and non-monetary assistance to individuals and households in need
(MPB, 1986:11). These and other activities have been mostly carried out through its affiliate Alavi
Foundation.14 According to the available information (MF, 2019), in the fiscal year 2017–2018, MF’s
health and education initiatives included activities on maternal health, constructing/equipping health
and medical centers, building schools, enhancing school performance, and granting subsidized loans to
university students in deprived areas. The organization’s activities in support of subsistence included
financial assistance provided to 331 families with several young children, housing assistance granted to
321 deprived families, 748 subsidized loans provided for rural employment, 79,000 tons of cement
purchased for reconstruction activities in disaster-stricken areas, 1,784 homes provided for families with
more than one disabled members, and 228,000 sets of clothes distributed to those in need. Its cultural
activities comprised the following: organizing student camps, constructing mosques in Bashagard, and
constructing a cultural and sports complex in Birjand. More importantly, in the more recent period, MF
has focused on empowerment and community development in a specific area of the country considered
deprived, namely, Qal’eh-Ganj. The activities have included a number of urban and telecommunication
infrastructure projects, several agricultural projects, health and education projects, and microfinance
and subsidized employment loans as well as cultural/religious activities. Some of the above projects
have been funded and carried out in collaboration with other institutions. MF has also made significant
commercial investments in agriculture, manufacturing and mining, services and trade, and construction.
These activities have been transformed into a major conglomerate—considered by some to be a
relatively significant actor in the Iranian economy. They appear to have been justified as supporting the
foundation’s social activities. While MF has no public budget line, it is not audited by the government
either. Yet, some of its large property assets are used by public or revolutionary agencies.
The Martyrs Foundation was established in March 1980 to provide social services for the families of
martyrs and those wounded in action. At the end of the war in 1988, its activities for the latter group
were transferred to the temporarily formed Mostazafan and Janbazan Foundation (1999). In 2004, all
social programs associated with martyrs, (former) prisoners of war, and those wounded in action were
combined under the Foundation of Martyrs and Veterans Affairs (FMVA). The foundation’s (revised)
statute mandates it to carry out a range of advocacy and cultural programs and provide various types of
assistance as well as medical, educational, housing, cultural, and other social services for its
beneficiaries (Majles, 1998, 2008). FMVA is headed by a vice president and leverages the stipulations of
the Comprehensive Law on Providing Services for the Self-sacrificing (isargaran)—aimed at the families
of the martyrs, (former) prisoners of war, and those wounded in action (Majles, 2013)—alongside
additional public budget allocations. According to the available information for the Iranian fiscal year
2018–2019 (SCI, 2020:589–593), the foundation covered 384,481 households associated with martyrs
(spouses, children, or parents). Of these, 173,669 households received salaries/stipends (averaging to
about 24 million rials per month per household). During the same period, the total number of those
covered by FMVA in the category of wounded in action was 582,955—of whom 91,083 received salaries
(associated with employment), 36,710 collected stipends, and 51,852 were recipients of payments for
nursing care (Ibid.). Complementing FMVA, the 15 Khordad Foundation was created by the order of
Ayatollah Khomeini in June of 1981 for those considered deprived and the families of martyrs as well as
those who had been wounded or otherwise active during the 1979 Revolution. Leveraging obligatory
religious alms, donations, and transferred confiscated assets (but no direct public funding), it has
financed the construction of schools, clinics and rural health facilities, student dormitories, and
infrastructure as well as various religious and ideological activities (15 Khordad Foundation, 2019).
Another significant decree, issued by Ayatollah Khomeini (1993b:365) in the Spring of 1987 based on
Article 49 of the Constitution, concerned managing various assets—including any asset without known
owners—at the disposal of the leader (vali-ye faqih). A taskforce named Execution of Imam Khomeini’s
Order (setad-e ejrai-ye farman-e emam Khomeini) was thereby established to supervise these assets on
behalf of the Supreme Leader. Tadbir Economic Development Group was created in 1999 as its
investment arm. While it has become an important actor in Iran’s economy, it is exempt from
supervision by the Inspection Organization of Iran (IOI, 2013). The Barakat Foundation (BF) constitutes
the taskforce’s main social welfare institution. BF was established by the order of the Supreme Leader in
2007—aiming for economic and social empowerment and public works in less developed and deprived
areas. The foundation has a declared enabling and participatory approach to socioeconomic
development and employment generation by especially facilitating the creation of productive firms
based on local comparative advantages. It has been involved in infrastructure projects, constructing
schools, and providing entrepreneurship development and training as well as health and insurance
services. In recent years, BF has developed several poverty alleviation and employment generation
modalities for rural and deprived populations across the provinces. Some of these have comprised
regional-type programs concerned with community-based activities and upgrading of social
infrastructure in certain localities. According to the foundation’s website, its portfolio has further
included investment (up to 49 percent) in 350 start-up firms through 2018 (BF, 2019).
Yet, the most important bonyad in terms of social welfare activity is IKRF. It was established in March
1979 as a charity tasked with addressing various forms of deprivation through social, subsistence, and
cultural/religious programs (IKRF, 2015). Its funding comes from the government as well as donations
and obligatory and non-obligatory religious alms (sadaqeh, zakat, etc.).15 Collected through various
means—including donation boxes installed in public locations across the country—the latter category of
its income amounted to nearly 6.9 trillion rials in the Iranian fiscal year 2018–2019 (SCI, 2020:587). It
also has a large number of active supporters for some of its activities—e.g., close to 630,000 supporters
of orphan children during 2018–2019 (Ibid, p. 584). Table 2.3 provides a summary of IKRF activities
carried out for more than 4 million beneficiaries—not limited to the elderly, female heads of household,
and orphans. The table excludes the foundation’s activities outside Iran. IKRF’s main welfare programs
include direct monetary assistance, loans, and food assistance (for children) as well as employment,
social and medical insurance, housing, and educational services. It also manages a number of additional
activities—e.g., public donations in association with Ramadan, Nowruz, the start of the school year, and
religious pilgrimage (IKRF, 2020).

Table 2.3 Service Centers and Beneficiaries of IKRF in Fiscal Year 2018–2019
Number of service centers 847
Main beneficiary categories Number of beneficiary households 1,974,170
Number of female-headed beneficiary households 1,071,892
Total number of beneficiaries 4,031,291
Number of supported elderly 1,456,901
Number of supported orphan children 288,795
Source: SCI (2019:583–587)
Social insurance services Number of female household heads under 50 years of 87,875
age
Number of rural or transhumant individuals 88,023
Number of individuals covered by employment initiatives 67,237
Number of beneficiaries of medical insurance services 999,853
Number of beneficiaries of housing provision or repair 107,423
services
Employment-related services Employment loans granted From IKRF’s employment Number 24,039
fund
Total amount (million rials) 3,454,875
From banking system Number 112.188
Total amount (million rials) 21,357,197
Number of individuals placed through employment services 1,374
Number of individuals served by skills training program 183,522
Number of no-interest loans granted 330,521
Number of marriage-assistance awards 86,796
Cultural and educational services Number of pre-college student beneficiaries 378,956
Number of university student beneficiaries 86,100
Number of participants in the life skills training program 826,527
Number of participants in the cultural training camps 349,798

Source: SCI (2019:583–587)

Insurance system
As described above, the welfare system’s insurance component had already reached a certain level of
maturity by the time of the 1979 Revolution. The post-revolutionary insurance activities have thus had a
firm basis upon which to expand. The initiatives have succeeded in further developing the scope of
insurance services and extending insurance coverage to additional groups. Notwithstanding the 1975
Social Security Law, Article 29 of the Islamic Republic Constitution (alongside Articles 3 and 21) has
provided the legal basis for insurance activities in the post-revolutionary period. Furthermore, the 2004
Law on Structure of Comprehensive Welfare and Social Security System has reaffirmed insurance
services as the pivot of Iran’s welfare system. The CWSS law divides the sector into social insurance and
health insurance—both with basic universal and supplemental components. Defined in relation to
employment, social insurance is considered the participatory part of the welfare system. It is funded by
the contributions of the employees and employers as well as the government. For certain categories of
workers who are targeted for protection (construction workers, drivers, weavers, etc.), the government’s
share is provided at higher rates in order to increase their rates of coverage.16
At present, a number of state-run social insurance schemes are active in the country. The largest
social insurance provider is the Social Security Organization (SSO), which operates under MCLSW. It not
only offers retirement, disability, survivors, and unemployment insurance (as well as a few other related
benefits) but also health insurance. Other social insurance schemes supervised by MCLSW are the Civil
Servants Pension Organization (providing pension, disability, and survivors insurance for government
employees) and the Social Insurance Fund for Farming, Rural, and Transhumant Populations (SIFFRTP).
Social insurance services for the armed forces and the employees of the Ministry of Defense are also
significant in Iran. Aside from these, there also exist a dozen contributory occupational schemes
affiliated with certain industries or organizations (the banking system, the oil industry, the national air
carrier, etc.) and providing a variety of services. The occupational insurance funds rely on contributions
from the employees and employers only, while the state-run schemes benefit from government
contributions as well (although at varying rates depending on the scheme).
SSO has remained by far the most important social insurance institution in Iran. Its services have
been divided into four layers, which include compulsory and voluntary coverage as well as insurance for
non-contract workers and special groups (among them are also the clients of IKRF and SWO). In 2018,
nearly 43 million persons (53.76 percent of the total population) were covered by SSO—of which
approximately 25.25 million were dependents and more than 6.5 million were pensioners (including
dependents) (SCI, 2020). Its coverage of around 14 million persons in the labor force (employed or
unemployed and including part of the public sector employees) amounted to more than half of the total
active population in the same year (Ibid.). Among the SSO-insured active population, about 68.5
percent were in the compulsory category and approximately 1.5 percent were unemployed (SSO, 2019).
SSO has also covered foreign workers—whose number in 2018 was reported as 51,000 insured in the
categories of voluntary contributors, non-contract workers, and special groups (Ibid.). Furthermore, in
2018, the organization owned 374 treatment and health facilities (including 70 hospitals) and had active
contracts with an additional 885 hospitals (SCI, 2020). SSO has been facing a solvency challenge
despite its significant assets, which are managed by SHASTA Holding with stakes in a large number of
companies. As discussed in the chapter on pension funds in this volume, excluding SIFFRTP, the same
problem has plagued the other state-run schemes (partly due to the increasing government debt to the
insurance institutions as well as asset management shortcomings). SIFFRTP was established in 2004 to
provide pension, disability, and survivors insurance to farming, rural, and transhumant populations, as
well as those in small towns, in the self-employed category (with a 10 percent share of government
contribution). Close to 1.73 million persons were covered by SIFFRTP in 2018, including nearly 135,000
clients of IKRF or SWO (SCI, 2020).
Since there is a chapter on health policy and healthcare system in this volume, health insurance is
only treated here by briefly discussing the activities of Iran Health Insurance Organization. IHIO is
currently supervised by MOHME. Previously known as Medical Care Insurance Organization, its origins
date back to the early 1970s. While in the past it provided health insurance to government employees
only, since the mid-1990s, it has offered its services to the general population as well. IHIO provides
different services to its various insured categories (see IHIO, 2020). Government employees comprise
the original category insured with IHIO. The insurance scheme for rural residents covers both regular
contributors and those who receive free services justified through means tests. Among those insured
under the Iranyan (Iranians) or universal health schemes, households in the lowest three income deciles
are covered for free. Those falling in the fourth income decile get a 50 percent discount on their
contributions. Others may be insured under the Iranyan scheme with regular contribution rates. The
miscellaneous category offers services to the families of the martyrs and veterans, seminary students,
and clients of SWO and IKRF. Finally, IHIO has an additional component for the provision of free health
services to patients suffering from special conditions. In 2018, more than 41.26 million persons
benefited from IHIO’s insurance services with the following breakdown: 13.1 percent government
employees, 1.3 percent under the Iranian scheme, 33.7 percent under the universal health insurance
scheme, 48.4 percent under the scheme for rural residents, and 3.5 percent miscellaneous (SCI, 2020).
Duplication is a major issue faced by the health insurance system. According to the head of IHIO, 90
million active health insurance booklets existed in the country at the beginning of 2019, while several
million individuals remained uncovered by any type of health insurance (IRNA, 2019). One reason for
these circumstances is the limitations of the health insurance scheme for rural residents in terms of
access and coverage.

Concluding remarks
Iran’s welfare institutions and programs have experienced significant transformations since their modest
beginnings a century ago. They have been influenced by political, social, and economic developments
and have in turn affected the Iranian society in significant ways. Prior to the 1979 Revolution, the major
focus of welfare policy was on social insurance for formal sector employees. In contrast, the diverse
governmental and para-governmental organizations of the post-revolutionary period have not only
extended social insurance to additional population categories, but have also delivered an array of social
assistance programs for the deprived and vulnerable groups in rural and urban areas. Furthermore,
access to basic education and health services has become nearly universal, while the government has
maintained a large volume of subsidies over the years. Improvements in a number of social indicators
can certainly be linked to these. At the same time, the efficacy, sustainability, inclusiveness, and cost-
effectiveness of Iran’s social welfare activities are questionable. For one thing, despite the adoption of
the Law on Structure of Comprehensive Welfare and Social Security System as well as the integration of
many public welfare agencies within the Ministry of Cooperatives, Labor, and Social Welfare and the
creation of several high councils to coordinate the activities with other ministries, social welfare
programs continue to be delivered by a large number of disparate entities with little synergy.
Furthermore, some very costly activities have failed to focus on yielding proper welfare outcomes. A
case in point is the cash transfer program, whose funds could have otherwise been leveraged much
more effectively toward clear poverty alleviation goals. Yet, significant parts of the welfare activities
have become the responsibility of para-governmental bonyads. On the one hand, this has added to the
coordination difficulties faced in the provision of welfare programs. On the other hand, the extent and
scope of service delivery by the para-governmental organizations have considerable discretionary
aspects. Furthermore, few thorough evaluations (or even monitoring and evaluation) for the country’s
major welfare programs have been carried out to measure their impact or efficiency. To end the chapter
on a positive note, the government has become increasingly cognizant of the need to better coordinate
the scattered welfare activities and ensure their effectiveness—and it has taken some, albeit small,
steps in addressing it during the recent period.

Appendix

Figure A1 Organizational Chart of the Ministry of Cooperatives, Labor, and Social

Welfare. Source: MCLSW (2020)

Notes
1. Compulsory savings in provident funds (usually interest-earning accounts) by
workers (often augmented by employer contributions) to address needs
associated with inability to work, old age, or death are less comprehensive
than social insurance schemes (Moridi, 1999:207).
2. Court-affiliated charities continued to play some role in the provision of social
services until the 1979 Revolution. For example, the National Association for
Child Assistance was created by Princess Ashraf in the post-WWII period in
close collaboration with UNICEF.
 3. An English translation of the Islamic Republic Constitution is accessible from
the website of WIPO
(https://www.wipo.int/edocs/lexdocs/laws/en/ir/ir001en.pdf).
4. An earlier attempt, in the form of a government bill, to integrate some of the
country’s welfare activities under a revamped Imam Khomeini Relief
Foundation did not meet approval. Another endeavor is also worth
mentioning: a plan for combating poverty was prepared in 2000, but never
left the drawing table (Madani Ghahfarokhi, 2015)
5. Management and Planning Organization, Plan Organization (PO), and Plan
and Budget Organization (PBO) are different names for the national planning
agency during various periods.
6. The law was initially supposed to further bring the Imam Khomeini Relief
Foundation under the sway of the new ministry’s policies. However, Article 18
of the law provides an exemption to this para-governmental organization.
7. Two important documents were adopted by the previous administration just
before Mahmoud Ahmadinejad took office as president: Document on
Poverty Reduction and Targeted Subsidies (Government Cabinet, 2005a) and
Guideline on Social Welfare Safety Net (Government Cabinet, 2005b). Given
the circumstances of their approval, their outcomes are not clear in terms of
specific poverty alleviation activities.
8. Given the rate of inflation, the price of fuel would also need readjustment. Of
note is that increasing the fuel prices has given impetus to widespread riots
(see Shahi and Abdoh-Tabrizi, 2020).
9. Iran’s current governance structure includes a number of high councils. Many
of them are nominally headed by the president and tasked with policy
coordination on crosscutting issues among various agencies. Each of their
secretariats is housed at a ministry most relevant to its subject.
10. In this way, it has to some extent infringed on the responsibilities of the
Urban Regeneration Corporation of the Ministry of Roads and Urban
Development. Yet, some of the other targeted social pathologies fall under
the responsibilities of the established agencies as well.
11. These institutions—which formerly were to be placed under the supervision
of the pre-revolutionary Ministry of Social Welfare—included National
Organization for Family Welfare, Association of Education and Wellbeing for
Children and Teenagers, Association for Supporting Orphans, National
Organization for Welfare of the Blind, National Organization for the Welfare
of the Deaf, National Association for Supporting Children, Rehabilitation
Association, Center for Family Welfare, Women’s Organization, and Royal
Social Services Organization. All relevant activities were also transferred from
the Health Ministry to SWO along with the Rural Culture Houses.
12. The original table in the SWO report compares the actual performance with
projected figures (presumably in relation to the goals of the Sixth
Development Plan). Since the reported achievement figures mostly hover in
the vicinity of 100 percent, they are not shown in Table 2.2. Of further note
is that, as some of the activities reported in the table have been carried out
in collaboration with others (e.g., Mostazafan Foundation or Housing
Foundation), they are likely to show up on their achievement reports as well.
13. This said, under the parliamentary government system prevailing in the early
post-revolutionary years, the responsibility for supervision over the activities
of the newly established foundations was given to the prime minister (a post
later abolished).
14. The pre-revolutionary Pahlavi Foundation was renamed Alavi Foundation
before becoming a part of the Mostazafan Foundation. The Alavi Foundation
in the United States is a distinct institution with a different mandate.
15. IKRF is officially tasked by the Supreme Leader with collecting zakat, which
is carried out under the supervision of its affiliate Central Zakat Council.
16. A number of insurance-related pieces of legislation have been adopted over
the years, including the 1986 law on self-employed insurance, the 1990 law
on unemployment insurance, the 1994 Universal Health Insurance Act, the
2000 law on insurance coverage for commercial drivers, the 2009 law on
insurance coverage for carpet weavers and handicraft workers, and most
recently the Health System Transformation Plan.

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3 Iran’s health policy and healthcare system

Achievements and challenges
Ali Hassanzadeh
DOI: 10.4324/9781003096757-3

Introduction
Health is not solely determined by healthcare, as behaviors alongside physical, social, and economic
milieus are also included among its major drivers (McGovern et al., 2014; Woolf et al., 2016). Yet public
sector social policies, programs, and services shape or influence the physical and socioeconomic
environments and create opportunities and incentives that affect behaviors (see DHHS, 2000, 2008).
Affected by a wide range of social and other public policy contexts, many of which are not readily
recognizable, health policy can thus have a much wider scope than healthcare policy. Health systems
generally perform four functions (WHO, 2000): financing, resource generation, service delivery, and
stewardship (the quality of governance in terms of direct intervention or delegation of authority to other
actors for managing citizens’ well-being). Furthermore, insurance schemes comprise a crucial part of
any functioning health system. With sound financing mechanisms and properly defined functions, they
can facilitate the delivery of high-quality healthcare services that rely on fair financial contributions and
are further responsive to the non-medical expectations of the general public (Ibid.).
Iran has experienced dramatic shifts in its fertility and population growth rates during the past 40
years, which have in turn affected its health system. A change in population policy immediately after the
Revolution resulted in the suspension of an earlier family planning program and led to a significant rise
in fertility and population growth rates. Following the revival of this program in the late 1980s, the
fertility rate declined significantly. By the late 2000s, the total fertility rate had been reduced to the
replacement level in most urban and some rural areas. The high growth rates experienced between the
mid-1970s and late 1990s had the effect of doubling the country’s population. With more than 80
million inhabitants, the country now has the third-largest population in the WHO Eastern Mediterranean
Region after Pakistan and Egypt. Given the high fertility rates during the first two post-revolutionary
decades, Iran’s population is young. Yet, based on the last census figures (SCI, 2020), the share of
Iran’s elderly (65 years of age or older) in the total population had grown to 6.8 percent by 2016, with
near-term implications for the country’s social security system. Urbanization has been another
prominent feature of the last four decades—its rate increasing from 47 to 74 percent of the population
between 1976 and 2016 (SCI, 2020). Iran has also hosted some of the largest numbers of refugees and
migrants in the world over the years—including a significant Afghan population (see UNHCR, 2018).
After the Revolution, the Iranian government embraced the primary healthcare model based on its
universal communitarian beliefs. This has theoretically continued to form the basis of health policy in
the country.1 A number of important measures have been carried out in this context—including the
adoption of the Universal Insurance Law, the Law on Structure of Comprehensive Welfare and Social
Security System, and, more recently, the Health System Transformation Plan. Furthermore, social
insurance has continued to evolve over the past four decades (see Hassanzadeh and Fakhimalizad,
2010). The lingering challenges notwithstanding, these developments have resulted in significant
improvements in various health indicators. This chapter traces these trends in the post-revolutionary
period from a social policy perspective to highlight both achievements and challenges of the evolving
health policies and healthcare system. The next section provides an overview of the developments in
Iran’s health sector as a prelude to the detailed analysis of the post-revolutionary healthcare system and
health policies in the rest of the chapter.

Overview of developments in Iran’s health sector

A report prepared a few years before the 1979 Revolution under the auspices of the Royal Social
Services Organization (Rahnema, 1975) found that, in the early 1970s, there were 2,769 outpatient
clinics in the country, of which more than 55 percent had been established in rural areas. Yet 60 percent
of Iran’s villages did not have access to primary healthcare, while only 13.7 percent of the country’s 31
million inhabitants (of which 42 percent were urban) had health insurance. According to the report,
there were 9,535 physicians in the country (almost half residing in Tehran and around one-third
considered specialists); the share of healthcare in total government expenditure was 2.5 percent; the
share of health in total household expenditure was 3.2 percent on average for the population (4.5
percent for wealthier families and 17.6 percent in rural areas); and 62 percent of the total health
expenditure was publicly financed (while 35 percent came from patients). Furthermore, the average life
expectancy at birth in the early to mid-1970s was barely above 50 years while the Iranian government
hired physicians from other countries (mostly from the Indian subcontinent) to address shortages of
medical staff, especially acute in rural areas (Ibid.).
After the Revolution, the government was given a strong mandate to close the above gaps. In
practice, the country has made significant strides in improving health and increasing access to
healthcare services in the post-revolutionary period (Bagheri Lankarani, 2019). Life expectancy at birth
increased from <55 years before 1979 to 76.48 years (75.41 years for males and 77.67 years for
females) in 2018 (World Bank, 2020). In fact, Iran is among the few countries that have gained more
than 35 years of life expectancy for both women and men since 1950, while the attained values are also
higher than the corresponding world averages (Setayesh and Mackey, 2016). Under-5 mortality declined
from 124 to 14.4 per 1,000 between 1978 and 2018, while maternal mortality decreased to 16 per
100,000 in 2017 (World Bank, 2020). Whereas the rate for child immunization was barely one-third in
the late 1970s, it is above 95 percent now (Table 3.1). The burden of preventable diseases has
consequently decreased to a great extent over the past four decades. For example, neonatal tetanus
and polio have been eliminated.2 Furthermore, by the early 2010s, 90 percent of the population had
become insured, the share of health in the gross domestic product had risen to 5.83 percent, and the
share of health in total household expenditure had grown to 6.7 and 7.4 percent on average in urban
and rural areas, respectively (SCI, 2011).

Table 3.1 Trends in Some Key Health Indicators

Variable 198520002008
Population growth rate/year (%) 3.2 1.24 1.28
Number of rural health posts 11,000 16,281 22,000
Access to rural health center (%) 20 90 95
Access to clean water supply (%) 71 95 98
Vaccination coverage (%) 20 95 98.8
Referral of patients to overseas facilities 11,000 200 0
Number of foreign physicians in the country* 3,153 0 0

Source: Marandi et al. (2014:91)

* Around 6,000 foreign physicians worked in Iran prior to the Revolution.

Government policy over the past four decades has succeeded in significantly improving access to
basic health services by establishing a primary healthcare network in rural areas (Table 3.1), changing
its service delivery model through a family physician program, and striving to extend the program to
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difficult for those endowed with a superfluity, or even a sufficiency of
wealth, to contemplate with indifference the misery and degradation
of less fortunately placed fellow human beings.
And lastly, since the entry to power of any given political party is
conditioned by the acquisition by that party of a sufficient number of
votes, given by a mainly proletarian electorate, it follows that politics
are likely to be framed in such a way as to commend themselves to
such an electorate. It would seem unfair to omit this fact from
consideration, though it has been over-emphasized by a school of
political cynics who deny the participation of humanitarian feelings in
politics (outside the realm of speech-making), and who attribute to
political expediency an excessive if not an exclusive rôle in
improving the lot of the very poor.
In virtue, then, of these factors it would nowadays be very difficult
for any individual, however worthless, actually to starve, and many
people of defective stock and bad physique who, in the ordinary
course of nature would perish, are now artificially kept alive to
perpetuate their kind.

The ‘economic’ factor tending to produce deterioration in the race,

presupposes the dysgenic.
Among uncivilized peoples it is the biologically superior type which
is most prolific. In advanced civilized countries, which are democratic
in social organization, the reverse obtains. Thus among most
primitive people, the Chief—i.e. the man with most courage,
initiative, resourcefulness and power of leadership—enjoys the
possession of most wives, and therefore produces most offspring.
The analogue of the drunken unemployable of to-day would probably
not be permitted to marry.
In England now, however, the drunken unemployable finds his
nearest approach to an occupation in endowing his ill-fated wife with
a stream of children, the regular succession of which is only
eventually interrupted by the breakdown, age, or premature death of
the wife, or by the death of the husband. And the only
discouragement extended to such a man is forthcoming from the
strictures passed upon him by his slum neighbours. None is
forthcoming from the Government, and none from the hospital, which
gratuitously delivers the wife of her children. In fact, information as to
how she may arrest this devastating succession of children is
deliberately withheld from her by nearly all hospitals, because it is
felt that the condition of public opinion, upon which the hospitals
largely depend for their finances, is averse from her being
enlightened in this respect.
The organization for relief in this country is now so comprehensive
and far-reaching that every necessity can be obtained gratis by
those who cannot afford to pay for it. Thus the wife of the poor man
is delivered of her children free of charge; the children are educated
for nothing; if employment is not available for them at the time of
leaving school, they are supplied with doles and relief free of
obligation. And when they become senile, they are given old age
pensions gratuitously. The funds necessary for the administration of
these works are levied from the middle and upper classes, in rates
and taxes.
Now the Englishman possesses a strong sentiment for institutions.
A man who has himself received a certain kind of education, and
who has been brought up according to a certain tradition, likes to
provide the same education and the same tradition for his children.
And if in the face of the increase in taxation, the rise in the cost of
living, and the expenses of education, he cannot afford this, sooner
than have children to whom he must deny what he considers a good
start in life, he prefers to limit his family. This obtains of the man who
suffers from a sense of obligation towards his children. The opposite
holds good of the unemployed man at the other end of the social
scale. He feels that he has sunk as low as is possible for him while
still remaining out of prison. Insidiously his ambition and his self-
respect become sapped by the soul-killing experience of finding
himself a useless parasite upon the community. Frequently, as prison
reports show, he takes to crime or drink. And slowly he is overcome
by that sense of irresponsibility, of bitterness, of carelessness of the
future, of improvident fatalism that takes possession of those living
under continuously adverse circumstances.
It is a matter of indifference to him how many children are born to
him since with each one his dole is increased. None of the restraints
which enter into the longer view of the future held by the middle
classes is felt by him. And so he goes ahead, and has as many
children as time and the health of his wife (of which last he does not
always show excessive consideration) will permit.
The following figures clearly illustrate this state of things. Whereas
the number of children produced annually by a thousand teachers is
95, by Church of England ministers is 101, by doctors is 103, the
average number produced by general labourers is 231. And among
these general labourers it is the least desirable individuals—those,
with least self-restraint, least foresight and with least consideration
for their wives or the future of their children—who have largest
families. And the undesirability may be of another kind. Mental
defectives generally are very prolific. Girls of this condition, if left
unwatched, are constantly becoming pregnant, there being
apparently no shortage of men prepared to take advantage sexually
of such unfortunate victims. It is to be noted that the economic
situation following war is especially favourable to this discrepancy of
fertility between classes. It would seem that the recent experience of
the significance of war, the existing sense of social instability, the
universal prevalence of unrest, hatred and international discord,
make the more considerate parents feel that the world is not a very
desirable place to bring children into. And this feeling is emphasized
if they have to pay in taxation four times what they had to pay before,
after which what money remains is worth about sixty-five per cent. of
its previous value. But these considerations hardly affect the classes
whose occupation is manual labour, or who have accustomed
themselves to no occupation at all.
Thus from a social point of view it is to be observed that
quantitatively, in relation to the present resources of the country,
England is at the present day considerably over-populated; and
qualitatively that many persons of all classes possessing inferior
physique are now artificially kept alive to perpetuate their stock,
while at the same time those elements of the population who, by lack
of intelligence or thrift or steadiness, or who by possession of other
defects have been reduced to the lowest level of the social structure,
to-day constitute the most fertile strain in the country.

(c) Individual.—The argument has frequently been heard that it is

desirable to communicate knowledge of Birth Control to the poorer
classes in the interests of the mother and the children.
It is difficult to know what percentage of the unwanted children
born in the poorer quarters of our large towns are conceived as the
result of a culpable aggression on the part of the husband upon his
wife—as when he returns home drunk on Saturday night and
threatens her with physical violence if she refuses to submit to his
conjugal rights—or as the result of an ignorance of Birth Control
methods which are familiar to the more educated classes. Certain it
is that a large percentage of the children born are unwanted, and
equally certain that among the very poor ignorance of contraception
is such as to appear incredible to those who have not had personal
experience of it.
Thus in the Autumn of 1924 a group of seven externs, working in
the district covered by Guy’s Hospital, made inquiries of the mothers
whose confinements they attended as to whether the child just born
had been wanted or not. The inquiries were made, when possible,
on the tenth day, when the patients were last visited, in such a way
that their answers were more likely to be favourably influenced by
fondness for the child than unfavourably by recollection of the pains
of labour. Furthermore, where any doubt existed, as for instance
when a woman replied that she had not particularly desired the baby
before it was born, but would not part with it for the world now, she
was given the benefit of the doubt and the baby was counted as
wanted. In all, inquiries were made in the case of seventy-eight
children born. Out of these, forty-seven were definitely not wanted,
and thirty-one wanted; and the writer can vouch for the fact that if
these figures erred at all, they did so on the side of moderation.
Thus, in at least one poor quarter of London, well over half of the
children born were emphatically not wanted.
The hardships imposed on the mother by such conditions are
sometimes very cruel. Numerous cases have been quoted by
advocates of Birth Control in their propaganda which there is not
space to reproduce here. The reader can, however, picture to
himself the experience of a woman suffering from the sickness,
shortness of breath, emotional instability, and deformity of
pregnancy, having to maintain life in some squalid slum, house-
keeping, cooking, cleaning and tending the children without change
of air or scene and without holidays, up till the incidence of the final
labour pains. And no sooner is a child born than the husband
reasserts his “rights,” and the same dismal cycle repeats itself
without prospect or hope of change, or of relief from a body that has
ceased to know the easy freedom and self-forgetfulness of good
health.
Indifference to the children appears. They are looked after out of a
stern sense of duty. The native impulse of spontaneous maternal
fondness is killed by the deadly routine, and when, as frequently
happens, the child dies, after a few pangs of grief, an easy
reconciliation (perhaps not without a deep-seated sense of inward
gratitude), is made to what is acknowledged as the “Will of the
Almighty.” Sometimes, the mother makes no secret of her relief. But
no man who has come for any length of time in contact with these
working-class mothers can fail to admire the patience, the stoicism
and the grim fortitude with which they face their dreary lot.
Their ignorance of Birth Control, in face of the publicity the subject
is now given in the Press, is almost incredible. The same quality of
fatalism and resignation felt by the soldier in the war before the
prospect of wounds or death, is still evinced by these women in the
matter of child-birth. One frequently meets with a sentiment that “we
must take what comes without grumbling,” that “what is fated must
be,” and even that “we must not fly in the face of the Almighty.” There
further exists a superstition that any object requiring internal
adjustment, like a pessary, runs the risk of being lost in the woman’s
inside.
 A further aspect of the problem is the prevalence under the
existing system of the practice of abortion. It is difficult, of course, to
give any trustworthy figures in this connexion, since in many cases
the fact that the mother has attempted to induce an abortion is not
revealed to the medical man who attends her, or to the hospital
authorities who take her in. The methods usually resorted to are of
an amazing crudity. They vary from the pregnant mother jumping
three or four times consecutively off a table on to the floor or
throwing herself downstairs, to her swallowing large quantities of
lead, ergot, quinine and other substances as well as nocuous doses
of emetics, irritants and purgatives.
Frequently the woman practises local violence upon herself, or
engages the services of a professional abortionist, a class more
numerous than is generally supposed. Such a person, after
practising his art, is in the habit of instructing the woman as soon as
she feels the pain or notices any haemorrhage, to report herself to a
medical man or present herself at a hospital where she is taken in as
an ordinary case of threatened abortion. The responsibility for what
may subsequently happen to the woman is thus effectively removed
from the abortionist’s shoulders, it being in the interest of everyone
concerned to preserve silence as to the part he has played.
The damage done to the health of many poor women by such
practices is enormous, and might largely be avoided by a judicious
instruction in Birth Control.
When the effects of all this upon the children are considered, it is
at once found that the question of Birth Control is intimately
connected with the housing problem. The overcrowding in large slum
families is notorious. At an early age the day is passed by these
children in the street, where, filthy and untended, they receive little
by way of notice from their elders except hard words or blows. Their
nights are spent packed, in a fetid atmosphere, several together in
the same bed from which they may witness their parents in sexual
intercourse, sometimes their mother in labour, and where they are
free to indulge in what, later in life, would be called incestuous
practices with one another. The writer has on more than one
occasion attended a woman in confinement while several children
were watching her from a bed in the same room, there being, in the
urgency of the situation, no time to dispose of them and nowhere
immediately available to send them.

Substantially this is what has been said on each side of this

complex question.
Before proceeding to discuss the arguments heretofore
propounded, it is necessary to emphasize the fact that from the
technical point of view a really satisfactory contraceptive does not
yet exist.
The chief disadvantage attaching to the contraceptive used by the
man is that it is quite impossible to induce the type of individual
whose procreation we would wish to restrict to use any contraceptive
at all.
The child is usually begotten by such a parent when he is drunk,
and everyone who has had experience of the conditions prevailing in
bad slums will know that it is futile to expect to achieve anything
along these lines through the man. The problem must be met
through the woman who, unlike the man, has to put up with the
discomfort and the pain of repeated pregnancies, and has to
shoulder the main burden of large families. Were it not for this
elementary human fact all attempts to teach Birth Control to the very
poor and destitute would fail completely.
Essentially, contraceptives which the woman can use are of two
sorts, and involve two principles—namely, a mechanical or
occlusive, and a chemical or spermicidal principle.
The objections to the first are two, namely that they are far from
being fool-proof, and that unless sanctioned by a doctor their use
can be followed by serious harm. It will be clear to any medical man
that for a patient suffering from gonorrhœal cervicitis, or indeed from
any condition involving a chronic cervical discharge, the use of an
occlusive pessary may lead to disastrous consequences. The
broadcasting of promiscuous advice as to the utilization of these
objects in the absence of an examination by a competent medical
man or woman is therefore to be strongly condemned.
The drawback, to all existing spermicidal suppositories is simply
their uncertainty, though they are as nearly fool-proof as anything of
the kind can be. It is possible that by further research a suppository,
physically harmless but of certain action may be discovered, in which
case, from its practical and sociological aspect, the problem of birth
control will be greatly simplified. It remains, however, a little doubtful
whether the chemical principle, however actively spermicidal, will
ever dispense with the necessity of some occlusive device. But this
is a sphere in which later research may prove of great value, and
nothing but a tentative statement is now possible. The statement
may, however, be made that if there is one method of Birth Control
as to whose harmfulness there is little room for doubt, it is the
method of coitus interruptus. In both sexes it gives rise to a condition
of chronic anxiety which, nowadays, is far from uncommon. In the
absence of local disease any of the above methods of contraception
is preferable to this one.
The effectiveness of those women’s contraceptives now in vogue
is difficult to estimate. There is little doubt that an unduly high
estimation of their success has been formed in certain quarters,
based on the assumption that in cases of failure, the working woman
will promptly report the event to the centre where the contraceptive
was obtained. The writer is persuaded that this is often a mistaken
assumption, and that many cases of failure pass in consequence
unnoted. There is also difficulty in knowing whether the instructions
in the adjustment of the occlusive pessary have been adequately
followed out. This process is not always easy, and as has been said
above, is far from fool-proof.
The arguments above advanced will now be considered in their
relation to (a) the Individual and (b) the Race.

(a) The Individual.—The arguments relating to the individual are

divisible into those applicable to (1) married, and (2) unmarried
persons.
 (1) It is to be noted that some of the contentions advanced on
each side apply to the different phases of the married life of the
woman.
Thus the revulsion of feeling against the use of contraceptives is
experienced chiefly by the woman who has had either no children or
few children. On the other hand, the woman who has the greatest
need for a knowledge of Birth Control is the one who has had many
children and desiring no more would probably feel little or no
aversion from taking precautions against conceiving them. It appears
to the writer that there is no adequate objection to communicating to
such a multiparous mother this much needed information.
The difficulty in the case of the newly-married woman is of another
type. The discrepancy between the ages at which human beings
reach sexual maturity and at which they find themselves capable of
maintaining a family, raises a number of exceedingly difficult
problems. Seeing that the sexual requirements of man constitute a
factor varying very greatly from individual to individual, and to a large
extent depending, as is now realized, upon a very complex balance
of glandular functions, it is more difficult than most popular moralists
seem to realize to lay down general rules applicable impartially to
every body.
Questions such as the following are raised: Can it reasonably be
expected of every man to live ten or more years of his sexually adult
life in complete continence? If not, is it better for him to marry young
and probably unequipped to support children, having remained
continent till that time, or to marry later, probably better equipped
financially to become a father, yet having had promiscuous
experience of women before marriage? And if he does marry young,
can he be expected to remain continent in his married life till he and
his wife feel that they can satisfactorily maintain a family? If he finds
he cannot do this, should he proceed to have children whom he
cannot properly support, or is it better for the couple to overcome
their dislike of contraceptives—a feeling which it is idle for advocates
of Birth Control to ignore—and thus avoid having children till they are
wanted? These are a few of the general questions which are raised
in this connexion to which no comprehensive answer can possibly be
given.
Much controversy has revolved round the question of the
desirability of self-control as a means of regulating births, and of its
universal practicability. It is here contended that where possible this
is immeasurably the best means of regulating births. At the same
time, it is futile to advance a counsel of such perfection and difficulty
that a highly probable failure to observe it will be followed by socially
disastrous results. Everyone would acknowledge that the Medical
Officer of a military unit who refused to instruct the soldiers under his
supervision in the precautions they should take against contracting
venereal disease, on the high moral grounds that they should never
expose themselves to such risk, would be carrying his idealism to
socially harmful lengths. Yet it is a much more difficult task for two
people in love with each other and living together in the intimacies of
married life to exercise continuous self-denial over long periods
extending to years, than it is for the soldier to abstain from
occasional promiscuity. In both cases it is clear that the correct
course is to start by putting the case for restraint as clearly and
forcibly as possible, and then to explain what steps must be taken in
the event of that restraint proving too great a task. In the Army and
Navy such appeals, when tactfully made, have met with a response
which justifies the view that, within limits, more can be done in this
way than might be supposed. As a general rule, then, it would
appear desirable that contraceptives should be used as little as
possible, especially in the early years of married life.
It also seems to the writer that in the case of normal married
people, too much has been made of the demoralizing effect of the
‘excessiveness’ of that indulgence which is supposed to be permitted
by the practice of contraception and which forms the basis of the
‘moral’ objection advanced in this country. This argument frequently
emanates from ecclesiastical sources, where knowledge of the
sexual aspect of human nature as well as of the technical side of
contraception is apt to be restricted and biassed. In effect, the man
who is sufficiently provident and considerate of his wife to encourage
the necessary precautions (which—a point too often ignored by
prejudiced critics—from the immediately selfish point of view both
parties would far sooner forego), is not the kind of man to indulge in
reprehensible excesses. Actually, demoralization seems rather to be
produced in those men who insist on gratifying themselves
regardless of their means, or of the welfare of the children they so
abundantly procreate, or of the feelings and health of their wives.
(2) The case of unmarried persons clearly falls into a different
category. There can be little doubt that the publicity given to the
subject of Birth Control has kindled the imagination of many young
people and led to various transgressions. The requirement here is to
discover a method by which at the same time this publicity may be
diminished and information made selectively more available. Both
these results could be achieved if the subject were taken up by the
Ministry of Health, and facilities created for the appropriate giving of
knowledge thereon by responsible qualified persons. By such means
the particular advice suited to each individual case could be privately
given, precisely where it is required, and steps might be taken to
stop the journalistic broadcasting of information and discussion
which has brought the subject into such discredit.
The effects of this measure would be comparable to the arrest of
the literature upon the subject of venereal diseases, and to the
reduction of their incidence that has been brought about by the
institution of special departments for the treatment of these diseases
in the large towns.
It is clear, however, that all arguments relating to the individual are
limited in their appeal to those in whose minds the conception of
morality is somehow related to that of individual harmony and
happiness and to the ideal of the general good. To those for whom
the word ‘morality’ has an ulterior meaning, unconnected with the
affairs of this world and relevant, solely, to the destiny of the
individual soul—I refer, here to those who enlist the ‘Will of God’ of
which they are the self-constituted interpreters, on their side—no
argument can be of any avail. Since the subject is thus removed
from the sphere of practical controversy, no further discussion is
possible, and the only thing to hope is that with the passage of time
such persons will become less numerous.
 Consideration of the arguments bearing upon the individual, it is
submitted, points to the desirability of (1) the Ministry of Health giving
the subject recognition and sanction, and (2) limiting the publicity
that now attaches to it.

(b) The Race. Turning now from the individual to the race, we
enter on a more difficult part of the subject. Adhering to our original
conception of the question we find that the solution (if it is to be
accepted as such) of the quantitative difficulty, and of the qualitative
problem described as ‘economic’ in nature, are one and the same.
The remedy for that aspect of the qualitative problem distinguished
as ‘dysgenic’ is different and must be considered separately.
The quantitative difficulty reduces itself to this. Admitting the
greater fertility to-day of those whose occupations are manual, or
who have no occupation at all (in other words, of the less select
type) and admitting that at the present moment the country is
overpopulated, how are we to be certain that we are not within sight
of more prosperous times when unemployment will disappear? And
how are we to feel assured that the dissemination of knowledge of
Birth Control will not, in the long run, lead to a disastrous decline in
the birth rate, producing an irretrievable diminution in our numbers?
The practical difficulty is here to prophesy what will be the
optimum population (i.e., that at which average return of labour per
individual would be greatest) for a given country fourteen years
ahead—at the time, that is, when the children born to-day would
enter the labour market. And here we are in the realm of almost pure
guesswork, and probably no economist could be found who would
venture upon more than a tentative speculation. What the optimum is
at the moment remains even a disputed question. There is reason to
suppose that unemployment returns are not necessarily a
trustworthy guide to the figure. A consensus of opinion however
exists (including that of Mr. Baldwin) that at the moment our numbers
are above their optimum, though expectations vary almost infinitely
as to what the optimum will be in a few years. Those who hope for a
boom in trade are satisfied with the present condition. Others who do
not anticipate such an event, would more willingly see an alteration
brought about. In the absence of any definite knowledge, the best we
can do is not to try to look too far ahead but to consider the solution
of our problems as we find them to-day. At the moment the
indisputable facts of the problem in this country are that we are over-
populated, that contraception is practised too much by the upper and
middle classes—perhaps even by the skilled working classes—and
not enough by the improvident unskilled masses at the bottom of the
social edifice.
The outstanding question is whether, as a result of a reduction of
our numbers to a point somewhere in the neighbourhood of the
economic optimum for this country—by which reduction the existing
burden of taxation, an increasing element of which is now devoted to
charity and relief, will be correspondingly diminished—our upper and
middle classes would be enabled to produce more children, and to
continue to produce enough to maintain our numbers in the
neighbourhood of their optimum.
The answer to this question depends on a further question. To
what extent is the relative sterility of the professional and skilled
working classes attributable to the heavy taxation now imposed on
them, and to the rise in the cost of living due to the war, and to what
extent is it the result of a preference shown by many people for a
more or less luxurious life, with few or no children, to a simpler life
with several children? In other words, to what extent is it attributable
to an economic factor and to what extent to motives of selfishness?
To what extent does that quality of self-interest play a part which
prompts a woman to refuse to breastfeed her baby because she is
afraid of the effects thereof upon her figure, which causes her to
abstain from having children because she dislikes the discomfort and
deformity preliminary to, and the actual pains of, childbirth, or which
makes her value amusements and expensive forms of pleasure and
recreation more highly than the experience of maternity? To what
extent is the relative infertility of the upper and middle classes
accounted for by the kind of egotism which induces the husband to
go in for entertaining, for a motor, and a house with several servants,
and generally to live in comparative affluence rather than do without
his superfluities and bring up a family of children? This attitude
nowadays certainly plays a part. Dissatisfaction with the elementary
pleasures of life, the craving after artificial stimuli and new
sensations, have always been, and probably will always remain, the
surest way to decadence in a race, and as such should be
combated. It is more in the interest of the race that the professional
and artisan classes should produce plenty of good children than that
the families of the very poor should be restricted. The argument is
sometimes advanced by complacent and wealthy individuals that the
working classes should be encouraged to reproduce freely in order
to keep up the country’s numbers. The dirty work is thrown, so to
speak, on the shoulders of those least qualified to discharge it. It
must appeal to the sense of justice of everyone that if the
maintenance of numbers of the race is to be conceived as a burden
(which of course it should not), the burden should be borne equally
by all classes.
The writer, who has had occasion to witness the results of over-
multiplication among the very poor, feels that it is only in fairness to
them that they should be equipped with every possible means of
improving their lot. At present one of the most important of such
means is the creation of facilities by the Ministry of Health for the
giving of information to those mothers who need it about how they
may limit their families and space their children. The immediate
social results of such a measure would unquestionably be good. The
remote results are more open to doubt. And it is this doubt which
renders it of the utmost importance to add that every form of
pressure and persuasion be brought to bear on the other classes, to
make them realize that it is morally incumbent on them, in the
interests of the country and of the race, to have as many children as
they can possibly afford, even at the expense of the minor luxuries of
life.
Up till now no such pressure has been exerted, and most people
regard it as a matter of moral indifference, whether, when married,
they have children or not. The problem as to whether the general
public, once it has been educated to realize the national importance
of the question of having children, would act upon it and thereby
avert the threat of a dwindling population is again one of great
difficulty. Admittedly, the example set us by France is not
encouraging. What is the likelihood of our following in her footsteps?
It is a delicate and important question. The writer is of the opinion
that our national character differs from that of the French in a way
that would make us more responsive to such an appeal for children
than the French have shown themselves to be. But again we are in
the realm of conjecture, and each person is entitled to his opinion.
The fact remains, however, that as long as the advertisement now
given to Birth Control is permitted to continue, its practice will
become yearly more prevalent. Its spread will certainly not be limited
by an attitude of official negativism towards it while the propaganda
is allowed to continue unchecked.

There remains the other process above distinguished as

‘dysgenic,’ the effect of which upon the quality of the race is probably
as detrimental as the one just considered, namely, the nurture and
perpetuation of the morally and physically unfit. This tendency can
only possibly be met by some form of Eugenic legislation. The
existing opposition to anything of the sort in this country probably
springs from a deep-seated dislike of bureaucratic interference in
people’s private lives, and is associated with a failure to realize the
harmful consequences of the existing order. It is of interest, however,
to observe that in America, where, in practice if not in theory,
individual liberty is valued less highly than in this country, various
enactments have been passed with a definitely Eugenic object. Thus
in the State of Nebraska marriage is forbidden to anyone afflicted
with venereal disease, and all applications for marriage licenses
have to be accompanied by affidavits of freedom from such disease.
Nobody acquainted with the nature of the infant mortality produced
by congenital syphilis can fail to approve of this measure.
In 1895 the State of Connecticut forbade the marriage of epileptics
and feeble-minded persons, under penalty of three years’
imprisonment. Everyone possessing knowledge of the Neurological
Out-patients’ Department of any large hospital must realize the
existing prevalence of epilepsy and appreciate how this hereditary
disease may incapacitate and stultify its victims. Montana provides
for the sterilizing of idiots, epileptics, feeble-minded and insane
persons, which measure must again commend itself to those aware
of how prolific such types can be if left unwatched. In males,
sterilization can be effected by a very minor operation, the use of X-
rays for this purpose being a procedure with regard to which there is
still medical controversy.
The principle might even be extended to individuals who, by a
record of crime or misdemeanour, prove themselves to belong to a
type which the nation does not want perpetuated. The sterilization of
the male leaves quite undisturbed his sexual function, though it
destroys his power of reproduction. The infringement which it
therefore involves of the liberty of the individual is far less than that
made by the State when it takes it upon itself to hang a man. Yet the
social benefit arising from the two measures cannot be compared.
Though it is difficult at this stage to define the details of Eugenic
legislation it seems likely that the physical and moral standard of the
race could broadly be raised by such a qualitative Birth Control.
The number of emigrants which we are in a position to send to the
Dominions each year is limited by difficulties of transport, and could
never amount to more than a fraction of our present unemployment
figure. There is further the important consideration that the
Dominions themselves do not relish the idea of our regarding them
as dumping grounds for our superfluous undesirables. The type of
emigrant they want is a courageous, hardworking, physically healthy
type, capable of initiative, of withstanding hardships without
grumbling, and of making a good citizen. Such do not tend to
become unemployed here, though, under very adverse
circumstances, they often may. A decrease of our population need
not therefore be opposed to our Imperial interests if, in the process,
we raise the standard of the race and improve our national stock.
 What will be the bearings of such enlightened Birth Control upon
the future? It will affect the Individual directly in his immediate
relation to his family, and it will influence him indirectly through its
effect upon the community as well as through the international
relationships of the country to which he belongs. The international
implications will be considered first, since they are the most far-
reaching.
The most obvious of these is the connexion between unrestricted
increase of population and wars. To what extent was the late war
due to this cause, and to what extent has the world learnt from it the
necessity of regulating such increase?
The causes of the late war were complex and are not yet wholly
understood. A fact however stands out clearly now that we
contemplate it in retrospect and now that changes in international
feelings have forced upon us a consideration of the point of view of
our late enemies. It is that the causes now recognized are essentially
different from what those causes were represented to be in the war
propaganda of the various belligerents.
It is to the interests of each belligerent to place the whole blame
for a war upon its enemies and completely to exculpate itself. Thus
in the late war both sides were convinced that they were fighting for
Righteousness, Liberty, Justice, Law and Order, Civilization, etc.,
against enemies inspired by cruelty, subtlety, insatiable greed,
jealousy and lust for world-power. When, however, we contemplate
the war after a lapse of several years through an aftermath of much
suffering and disillusionment, we realize that it was the product of
historical causes and racial antipathies and of certain social and
economic phenomena rather than of any unequal partition of moral
qualities.
Before the war, Great Britain was the most powerful nation in the
world and was naturally jealous of any other nation that coveted, or
aspired to usurp, her enviable status.
Russia found herself in a condition of acute social instability,
momentarily threatened by the event which in 1917 cast her beyond
the pale of western civilization. To Russia the war came as a
happening which could dissipate the revolutionary ferments, mobilize
her refractory workers into the army, and, through the tremendous
appeal of a national crusade, sidetrack the forces of anarchy in
precisely the way that those forces were sidetracked in Ireland in
1914. Had the war been won quickly—as there were grounds for
hoping when it began—the Czar would probably still be on the
throne of an enlarged and yet more powerful Russia.
By the events of the last hundred years Germany had been
elevated from a position of relative unimportance to that of the most
highly organized and perfectly industrialized power in the world. In
achieving this promotion she had earned the venomous hatred, born
of her humiliation, of France, and the slowly growing, disquieting
suspicion of Great Britain.
Conscious of her growing industrial strength, becoming restive
within the frontiers which confined her swelling population, aware of
the hostility of her neighbours, and never allowed to forget that her
kingdom had been built upon the sword, the youthful soul of
Germany found, in her Emperor, a fitting symbol for her aspirations.
He was the creation of her mood, and together with the party of
which he was the mouthpiece led her to her downfall.
It would not be a fair statement to assert that population pressure
in Germany was the cause of the war. It was unquestionably a part-
cause and a predisposing cause, as it was of migration in prehistoric
times and of most wars since. But it was here complicated by other
factors both inside and outside Germany.
The universal desire to avert a similar catastrophe in the future
has materialized in the League of Nations. It is hoped that through its
agency many precipitating causes of war will be eliminated. By it
provocation will be made more difficult and commitment more
perilous. But the essential predisposing cause, that of over-
multiplication, remains unassailed. Like some dull-witted monster it is
left to wax in strength and malignancy within its fetters, till at last, no
longer to be denied, it will break all bounds, turn, and rend the world.
From the late war no lesson as to the importance of population
control has been learnt. Will another war be necessary to teach us
this lesson?
Earlier in the book reference was made to the possibility of a war
between Japan and either America or ourselves. Though this
contingency is being thought out in detail by the naval authorities of
all three countries, care is taken in diplomatic circles to assert that
such practical measures as the equipment of Singapore imply no
unfriendly or suspicious attitude toward Japan. Few people,
however, are deceived by these utterances. The mutual fear and
distrust is growing and will probably continue to grow. There is little
doubt, that, if this war comes about, its essential cause, the increase
of Japanese in excess of the power of maintenance of their country,
will be obscured by that outburst of vilification of the enemy and
glorification of self which is now demanded by popular sentiment in
the conduct of wars. Yet this cause will remain here incomparably
the most important of the predisposing causes. After such a war will
there remain any vestige of civilization to profit from the hard-won
lesson?
The principal aim of Soviet Russia to-day is the spread of her
communistic principles throughout the world. The chief obstacles to
this are the firmly entrenched and powerful capitalism of the United
States, and the more diffused and essentially more vulnerable
capitalistic organisations of the British Empire. These last the
Russians are doing their best to undermine now. A second world war
would give them a long-coveted opportunity. Realizing that
prolonged wars and the social unrest that follows them are the soil
from which revolutions most readily spring, Russia would probably
associate herself with Japan. The secret treaty between the two
countries whose aspirations and political ideals have otherwise little
in common, gives a premonition of this. By the time a war comes it is
possible that the exploitation of China by Japan will be more
complete, and the effects of anti-foreign propaganda, carried on by
Russia, more far-reaching. The increase of anti-British feeling in
India, also stimulated by Russia, will co-operate to unify Asia and
European Russia in a solid block, determined to shake off the yoke
of the Western Powers and of America.
 Such a war could never be conclusive, however prolonged. The
vast length of the fighting front, the colossal numbers of active
belligerents, and the enhanced destructiveness of war would
probably lead, after initial successes, to a collapse of the organized
fighting forces of the West. The seeds of revolution in Europe, by
then more deeply sown, would germinate, and the present social
order would come to an end. The continent would then embark upon
a new phase of its history, with the first chapter steeped in the
bloodshed of revolution, and founded upon the ruins of our industrial
civilization. The centre of civilization might then shift to the southern
hemisphere where to-day there is less to destroy.
The fact remains that if the price that humanity will have to pay for
learning to regulate its over-multiplication is to be a second world
war—the much talked of war, this time, between East and West—it is
doubtful if there will be left a civilization capable of learning the
lesson. It seems worth while, therefore, to try to put the principle into
effect before we are taught its necessity in such a way. To this there
are at present two obstacles, namely the nature of certain religions
and the criterion of national evaluation that is still prevalent.
The first obstacle rests in the fact that two powerful religions have
not adapted themselves to the changes of human relationships
imposed by the unification through science of the human race.
These religions remain with their eyes fixed either on the next world
or on the exclusive welfare of the tribe.
By the Catholic Church a mode of behaviour is imposed calculated
to achieve salvation in the next world irrespective of its effects on
this one. Omitting from consideration, as probably unjust, the motive
of wishing to increase the number of its adherents, with which the
Roman Catholic Church has been charged by reason of its attitude
towards Birth Control, there remains a motive arising from a theory
of a relation between salvation in the next world and certain modes
of behaviour in this. Contraception is condemned because it is held
to incur damnation. It is not condemned because it leads to social
injustice, to wars, to human suffering. The point is that it is still
condemned in spite of its leading away from these things. It is
therefore devoutly to be hoped that in the event of the population of