Abstract

The present work analyzes the development of the international standards in the area of financing and administration of social security and their influence on the reforms of social security systems in transitions economies of Eastern Europe. Particular attention is given to the concept of the rights-based approach to development as a leading principle behind the development agenda of international organizations. In particular, ILO Convention No. 102 and other international legal standards regulating the financing and administration of social security schemes are examined regarding their suitability for the ratification by transition economies. The research of possible reasons is undertaken to answer the question as to why the standards have received an unusually low level of ratifications. Examples of several Latin American countries are provided to illustrate the lack of sustainability as a result of pension reforms which were carried out in contradiction to the basic principles of the financing and administration of social security systems as provided by ILO legal instruments. Further, the mechanisms of financing and administration of social security systems in Russia and Ukraine are analyzed in order to assess the countries’ readiness to ratify ILO instruments in these areas, as well as to assess the suitability of the instruments for these countries. The research has showed that despite being largely outdated, ILO Convention No. 102 still has significant influence on the development of social security systems and provides for fundamental principles in the areas of financing and administration of social security schemes. Russia and Ukraine are currently at different stages of readiness to ratify the Convention, as they adopted contrasting strategies in the development of social security systems. In particular, due to the introduction of privately funded social security schemes Russia is likely to be reluctant to proceed with the ratification. However, the research has revealed no legal obstacles for Ukraine to be able to ratify the Convention.