"Pension reform in European social insurance countries"

Schludi, Martin. (2001) "Pension reform in European social insurance countries". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)

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Abstract

This paper analyzes national processes of pension reform in various European welfare states. The countries under study (Austria, France, Germany, Italy, Sweden) not only face similar fiscal, demographic and competitive pressures since the early 1990s, but are also characterized by broadly similar pension arrangements. Being from the defined benefit/pay-as-you-go type, mainly financed through wage-based social contributions, pension systems in these countries reveal a high vulnerability to changes in demographic and employment structures. Generally, I argue, that European integration has exerted only marginal influence on national pension policies. Moreover, the impact of European integration does not explain cross-country variance in pension reform outcomes: While we observe substantial similarities in the direction of reform, the degree of policy change varies considerable even among countries with similar pension policy profiles. By the same token, the failure of several pension reforms in European welfare states suggests, that the presence of the EMU convergence criteria and increased economic internationalization was by no means a sufficient condition for the successful implementation of pension reforms. Thus, only a closer inspection of national decision making processes does allow for an explanation of different pension reform outcomes. The political feasibility of a substantial pension reform critically depends on the government's ability to orchestrate a reform consensus either among the major political parties on both sides of the political center or between the government and the trade unions. The capacity of governments to take concerted action in pension reform is again largely a result of the strategic interactions taking place between these actors.

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