The right to social security is a human right. Social security system has to protect the population against social risks and to ensure an adequate standard of living. However, it is often forgotten in this context that social security can also make a positive contribution to the economic development of an industrialized or developing nation, as the following section shows. Social security should therefore always be a central component of economic development policy. In this context, a distinction has to be made between the reasons for its economic utility on the one hand and the effectiveness or efficiency of welfare states on the other. Undoubtedly, the effectiveness and efficiency of both welfare states and social security systems has to be proven. If welfare states or social security systems do not satisfy effectiveness or efficiency criteria, reforms will be necessary.