‘West Coast Seminars’
on
Economic and Social Change in Russia and Eastern Europe
(Glasgow, West of Scotland [Paisley campus] and Strathclyde Universities)
Fifteenth Annual Series: 2008-09
‘Can the Power Resources perspective and the Varieties of Capitalism approach shed more light on institutional change in Central European pension systems?’
Marek Naczyk
University of Oxford
St Antony's College/Department of Politics and International Relations
Wednesday 29 April 2009
at 5.30 pm
University of West of Scotland (Paisley)
Room A407
Tea and coffee will be available from 5.00
All Welcome
* for further details please contact
Prof Terry Cox, University of Glasgow 0141 330 2343
Dr Irene McMaster, University of Strathclyde 0141 554 4905
Prof Martin Myant, University of West of Scotland 0141 848 3367
‘Can the Power Resources perspective and the Varieties of Capitalism approach shed more light on institutional change in Central European pension systems?’
Marek Naczyk
University of Oxford
St Antony's College/Department of Politics and International Relations
Wednesday 29 April 2009
ABSTRACT
The 1997/1998 Polish pension reform is often quoted as a prime example of a World Bank-style pension reform. Such reforms aim at reducing the role played by pension schemes financed on a pay-as-you-go basis and introduce a compulsory funded pillar in the public pension system. In Western Europe and in North America, pensions have long been considered a minefield for politicians who attempt to reform them. Throughout the 1990s, institutionalist scholars predicted that institutional change in pension systems would be rather unlikely due to the large support they enjoy among current and future beneficiaries (Pierson 1994, Bonoli and Palier 2000, Myles and Pierson 2001). However, a number of pension reforms in CEE countries, including the Polish one, as well as more recent transformations in the public-private mix of many Western European pension systems have contradicted these predictions.
Ideationalist scholars argue that the surprising success of such radical pension reform strategies can be explained by the fact that pension policy-makers have adopted new 'policy paradigms' (Hall 1993). Müller (1999) and Orenstein (2008) consider the transnational campaign for the privatisation of pension systems led by the World Bank as the determining factor behind the adoption of radical pension reforms in Central and Eastern Europe. However, as they try to explain why some countries have 'privatised' their pension systems while others have not, Müller and Orenstein define their dependent variable too broadly and as a consequence fail to notice that even when they have fundamentally reformed their pension systems, CEE - but also Western European - countries have chosen relatively different combinations of pension instruments whose redistributive effects and institutional logics may in fact be at odds. Thus, both scholars fail to account for variation in significant aspects of pension reforms, such as differences: a) in the type of occupational categories that are affected by pension reforms; b) in the type of benefit formulas that have been chosen (defined-benefit versus defined-contribution); c) in the way newly created private pension funds are managed (profit-making companies versus non-profit organisations).
This paper will investigate whether pension reforms in Central Europe can be explained more satisfactorily by interest-based approaches such as the power resources theory (Korpi 1978) and the Varieties of Capitalism approach (Hall and Soskice 2001). The paper hypothesises that institutional change in pension systems can to a large extent be explained by parties' electoral strategies as well as by trade unions' and business groups' organisational strategies and their defence of what they consider to be their core constituencies. The theoretical model developed in the paper is meant to account for divergent forms of institutional change both in Central European and in Western European Bismarckian pension systems. However, this paper will focus on the study of the 1997/1998 Polish pension reform, since it may be considered as a 'crucial case' which will offer a strong test the proposed theoretical model.