Three Routes to Pension Reform: Politics and Institutions in Reforming Pensions in Denmark,Finland and Sweden

By analysing pension reforms in three Nordic countries – Denmark, Finland and Sweden – that apply different institutional solutions in their old‐age security programmes, this article argues that the political processes that shaped the country‐specific pension set‐ups in the 1950s and 1960s had important ramifications for subsequent reform possibilities. A high degree of inertia exists not only in the institutions themselves but also in the political reform options and the ways in which pensions were reformed. The analysis shows that the ‘new politics’ was not new in any of the three countries. Furthermore, given the differences in the three cases, the analysis questions the nature of pension reform. The Swedish reform in the late 1990s was a ‘big bang’ that eliminated the old and changed everything; the Finns built on piecemeal reforms of conversion that gradually changed the whole system; and, while the Danish story appears to be one of stability and status quo, the drift of Danish policy ultimately changed the basic characteristics of the system. Although all three countries have more or less thoroughly reformed their pensions, the reform processes have differed according to both historical legacies and institutional frameworks.     

The Brazilian pension model: The pending agenda

To achieve national goals defined by the 1988 Brazilian Federal Constitution, cash benefits alone are insufficient in the absence of more robust social services to reduce inequalities and improve social cohesion. The Constitution, albeit of national importance and international significance, has not addressed many institutional and administrative weaknesses in the design of the national pension system. Although coverage has been increased and inequality reduced, these measures are not sufficient. Brazil's ambitions to further develop social policies (and, indeed, to live up to its accorded international status as a social policy leader) may be constrained by an over‐reliance on conditional cash transfers such as those provided under the Bolsa Família programme. Brazil faces a major political‐economy challenge in addressing all these issues because the policy reform process is difficult, and, more importantly, because of the embedded role of vested interests. Moreover, Brazil must tackle these issues in the face of growing fiscal pressures, which could weaken the current political legitimacy of social policy and undermine important recent successes.     

Advocacy Coalitions and Health Politics in Korea

This article analyses the political dynamics underlying health care reform in Korea after the Asian economic crisis. The reform was a significant volte‐face in respect of the social policy paradigm, which now aims to enhance equity in National Health Insurance. The article pays special attention to the evolution of the advocacy coalition for equity in health policy and how it developed the two attributes required for successful policy change: institutional strength and the elaboration of policy rationale for reform. This process was not a simple linear development but a combination of setbacks and advances. The article also takes into consideration the structural conditions that set the policy environment over the course of the advocacy coalition's evolution since the 1960s. In short, the policy reform of 2000 was not a simple policy change in response to the economic crisis, but rather the outcome of the long‐term evolution of the advocacy coalition for equity in health policy.     

A Disaster Foretold? The Case of the Personal Pension

With the creation of the State Earnings Related Pension Scheme (SERPS) in 1975, pensions policy in the UK was characterized by a consensus between the Labour and Conservative parties. By the mid 1980s, under the influence of New Right ideas, the Conservatives had broken with this consensus. Conservative pensions policy now centred on the ideological objectives of promoting individual property ownership and pension provision “independent”of the State. Such objectives were central to the creation of personal pensions under the 1986 Social Security Act. This article examines the political background to the emergence of this policy and seeks to evaluate how far the stated aims have been achieved. It does this by analysing the current controversy over methods of selling personal pensions and by looking at statistical evidence on the incomes of individuals who have taken out personal pensions. The argument concludes that personal pensions have been, predominantly, taken out by groups with low incomes, and the combination of low contributions and transaction costs threatens to lead to inadequate pension provision; such problems are likely to be particularly marked for women. In turn this conclusion, when set in the context of the tax regime applying to personal pensions, raises further doubts over the extent to which “independent”pension provision is likely to be achieved.     

Garbage‐can Policy‐making Meets Neo‐liberal Ideology: Twenty Five Years of Redundant Reform of the English National Health Service

The garbage‐can theory of decision‐making (Cohen et al. 1972), has been adapted into a perspective on policy‐making, with adaptations of the approach placing notable emphasis upon the health sector (Kingdon 2006; Paton 2006). This article creates an adapted ‘garbage‐can’ framework to help explain each stage of the reform of the English National Health Service (NHS) over the last 25 years. The emergence of the key idea and resultant policy at each stage of reform of the English NHS has been arational and indeed sometimes irrational. Policy has reflected advocacy by policy‐salesmen (Kingdon 2002), proffering ‘solutions’ to ill‐defined problems and answers to unasked questions, and politicians' short‐termist responses at each decision‐point. Yet the garbage‐can alone is not enough: if arationality rules in policy‐making day to day, this does not mean that there is not an overall ideological context, trend or bias in reform. The article also posits that ‘market reform’ has derived from the ideological hegemony of a naive anti‐statism (hostility to a misleadingly defined and often mythological ‘centralist state’) in public services and enthusiasm for market competition rather than any evidence‐based application of pro‐market ideas to health policy. A question arises: how are these two approaches (short‐term arationality and longer‐term ideological bias) combined in explanation of how policy over time is biased in a particular direction while seemingly arbitrary and directionless at each messy decision‐point. The article attempts to combine the insights of a garbage‐can approach with wider explanations of ideological hegemony.     

Children against parents? The politics of intergenerational recalibration in Southern Europe

Traditionally, Southern European countries displayed remarkably elderly biased social policy arrangements. This article introduces the notion of intergenerational recalibration to capture reforms aimed at rebalancing the generational profile of Southern European welfare states via the expansion of family policy and social assistance schemes—both monetary benefits and care services—and retrenchment in the field of pensions. Then, it elaborates theoretically on the political dimension of this policy strategy, focusing on the implications of the peculiar combination of expansionary and retrenchment reforms, to advance the hypotheses that domestic politics would prevent the realization of such an agenda, whereas the latter would be favored by a major role of supranational actors, especially the European Union. To test these hypotheses, we systematically analyze policy trajectories in the field of pensions and social assistance in Italy and Spain between the mid‐1990s and 2016. This allows, first, to argue that investment in “pro‐children” measures has not adequately balanced the reduction of pro‐parents expenditure and, second, to question the idea that domestic political incentives to expand “pro‐children” policies are necessarily too weak as well as the “enabling” role of external pressures in pursuing intergenerational recalibration.     

Old-age Pensions in Spain: Recent Reforms and Some of Their Consequences for the Risk of Poverty

The starting point of this study is based on the supposition that the successive reforms carried out on the Spanish system of old‐age pensions since the 1980s have altered both the intergenerational distribution of income and the risk of poverty for the elderly. The article will first outline how demographic factors and personal incomes affect the risk of poverty among the elderly. The second part focuses attention on the mediating role played by the social security system in the distribution of intergenerational income, and underlines how the adoption of a longitudinal viewpoint of the intergenerational positions helps us to understand the development of the risk of poverty among the elderly. The third part describes in brief the successive reforms that were carried out on the Spanish regime of retirement pensions. Finally, an analysis of the evolution of the personal incomes of the elderly and younger generations has been made, based on the data collected by the European Community Household Panel from 1994 to 2001. This analysis suggests that the reforms have increased the risk of poverty among the over‐60s owing to a combination of two factors. On the one hand, there has been an increasing tendency among the over‐60s to stop working completely, which has reduced job earnings especially for men aged between 60 and 70. Even more important has been the failure of public pensions to keep pace with the increase in the standard of living, though it is true that they have helped maintain the average purchasing power of the less well‐off old‐age pensioners.     

From Austerity to Austerity: The Political Economy of Public Pension Reforms in Romania and Bulgaria

This article discusses the trajectories of pension system reforms in two of the latecomers to the EU: Bulgaria and Romania. It finds that over the past two decades, the two countries pursued increasingly dissimilar public pension reforms for managing their respective public pay‐as‐you‐go pension systems. Using a political institutionalist theoretical framework, I argue that the divergence between the two cases is attributable to multiple factors. First, different temporary political compromises between national and international actors generated reforms that retrenched public pensions and introduced mandatory private accounts. Second, pension reforms often had unintended consequences that limited their intended impact. Third, incremental adjustments introduced by governments in response to political pressures caused alternating phases of austerity and generosity that catered to different constituencies in each country. In Romania, reform outcomes amounted to a moderately generous pension system, financed through relatively high contribution rates with a small funded component, while in the case of Bulgaria, the pension system evolved into a meagre programme, financed through low contribution rates and a larger private pillar.     

Change and Resilience in Welfare State Policy. The Politics of Sickness Insurance in Norway and Sweden

This article compares the processes of reforming sickness insurance in Norway and Sweden. Despite the many similarities between the Norwegian and Swedish welfare states, they have taken different paths when it comes to reforming their sickness insurance systems. In the period between 1990 and 2010 Sweden changed its wage replacement levels and levels of employer financing several times, while in Norway they remain basically unchanged since 1978, notwithstanding many reform initiatives by political authorities. Why have the two cases evolved so differently? We address this question by using Peter Starke's review of the retrenchment literature which outlines four major strands of theorizing the politics of welfare reform: neo‐functionalism, conflict theories, institutionalist theories and discourse theory. Rather than treating these as providing competing explanations, the article suggests that elements from all perspectives bring insights to the case. The need for policy reform must always be communicated in a way that can be understood and approved in order to materialize as actual policy change. But discursive change and apparently seductive frames will not always be enough. This comparative analysis illustrates that the chance of success for new frames or discourses depends on the institutional, political and functional context into which they are inserted. Similar attempts at framing the need for reform and cutbacks have had different effects in the two countries depending on the character of the counter forces and extant frames reformers are up against. On the other hand, over time discourses and frames also shape institutions and political relations.     

Social health insurance development in Mongolia: Opportunities and challenges in moving towards Universal Health Coverage

Mongolia achieved high population coverage under mandatory health insurance relatively quickly. This fact was viewed by policy‐ and decision‐makers as a central issue for health financing reform in Mongolia. Health insurance brought many new features for health service planning, provision, funding and resource management. Based on initial achievements, health insurance came to be strategically considered as the vehicle for achieving universal coverage. The article analyses developments in Mongolia's health insurance over the last decade along with the core policy dimensions of Universal Health Coverage. It examines various reform approaches and the numerous amendments to laws that have been implemented during this period and discusses new opportunities as well as challenges. The analytical review and findings discussed suggest that Mongolia has a need for evidence‐based policy decisions and informed political support, with health insurance backed by robust institutional and administrative capacities. More generally, it also emphasizes that health policy goals and objectives can be attained by strengthening and making transparent and publicly‐accountable all health system financing functions and arrangements. The policy analysis, experiences, lessons and proposed strategies presented with regard to Mongolia intend to stimulate wider discussions on health insurance development as well as promote continuing focused research on specific aspects of health insurance and public financing reform.     

Pension policy design changes in EU countries since the mid‐1990s

Recent decades have been characterised by significant pension reforms. This article reviews this process, focusing on five policy design issues that have concerned policymakers: optimising poverty alleviation effectiveness; redefining the state's role in smoothing incomes over the life‐course; balancing contributions to benefits; adjusting the system to respond to demographic, economic and social changes; and ensuring that reforms will be long‐lasting. While the role of state pensions is diminishing, there is a growing realisation of the need to ensure that they remain adequate, reigniting interest in minimum pensions and contribution credits. The expanding role of private pensions has led governments to intervene more in their operation. Policymakers have shown interest in automatic adjustment mechanisms to bring about required economic changes. However, there is greater understanding that for these to happen, the state has to engage more with its citizens.     

The Negative Effects of Populism on Gay and Lesbian Rights*

Objective. The objective of this article is to examine the degree to which populist features of state governments affect minority interests, particularly gays, lesbians, and bisexuals (GLB) Method. We examine the effects of specific institutional features that affect state government responsiveness to majority preferences on GLB policies: bans on same‐sex marriage and hate crime. We also control for variations in political environment. Results. Features that increase popular control over policy making and policymakers advance anti‐GLB policies but have little effect on pro‐GLB policies; however, legislative term limits have the opposite effect. Further, constituency size and senators' term length increases both types of policies. Conclusions. The findings indicate that an unpopular minority is likely to be harmed by populist features that increase the role of citizens and may be helped by features that shield legislators from majoritarian preferences.     

A State‐centred Explanation of the Finance‐Pension Nexus: New Zealand's Pension Reforms as a Typical Case

This study analyses the decision‐making processes that led to the introduction of the New Zealand Superannuation Fund (a public pension reserve and investment fund), as well as the KiwiSaver Scheme, which is New Zealand's first soft‐compulsory private pension scheme. Why and how are governments engaged in the development of funded pensions? These are the questions this study addresses. In analyzing the finance‐pension nexus in New Zealand, this article adopts a state‐centric approach. It argues that pension funding reforms are shaped by state officials who pursue their own motives because policymakers frame funded pensions as an instrument for achieving broader fiscal, economic and financial policy outcomes. Because New Zealand is a typical case of a state‐centric explanation, a study of its pension funding reforms helps in finding causal links between finance and pensions.     

The European flexicurity concept and the Dutch and Danish flexicurity models: How have they managed the Great Recession?

In the mid‐2000s, the flexicurity concept was developed into a key EU policy concept. It drew its inspiration from the Danish and Dutch practices to combine labor market flexibility and security. However, the crisis' focus on bringing down national deficits and debts left little room to advance the concept. Lately, more emphasis has been placed on the need to take into consideration the social aspect of economic policy‐making. Current EU level documents see flexicurity as a guidance for structural reforms. However, the European flexicurity initiatives seem never to have had much impact in Denmark and the Netherlands. There are few accounts of the recent adjustment to the flexicurity models, be it at the EU or at national levels. Therefore, this article assesses the fate of flexicurity by scrutinizing its (adjusted) use as a political concept as well as a socio‐economic model. Although the Danish flexicurity model resembles the European flexicurity concept to a large extent, recent reforms have, overall, weakened rather than strengthened the flexicurity model. The Dutch flexicurity model has a narrower focus on normalizing atypical work, while recent reforms support this narrow flexicurity model. Meanwhile, the EU level concept has been changing every year, encompassing a growing number of issues.     

The distributive impact of private pensions in the context of the institutional designs of public pension systems across OECD countries

Income inequality has been increasing across the developed world for the last few decades. The welfare state has played an important role in reducing income inequality, but it has now entered into an era of transformation. The shift from public to private pension schemes is one of the main policy instruments in this shift. An increase in private pensions is expected to create an increase in income inequality. Therefore, using data from OECD SOCX, this study examined how the effect of private pensions on income inequality might be changed by the institutional design of public pension systems. The results suggest that the effect of private pensions differs when the institutional design of the public pension system is considered. An increase in private pensions is related to an increase in income inequality when the public pension has a low level of coverage and a high level of earnings‐relatedness.     

Towards a Multi‐level Approach on Frontline Interactions in the Public Sector: Institutional Transformations and the Dynamics of Real‐time Interactions

This study develops a multi‐level approach on frontline interactions in the public sector. Previous research suggests that detailed analyses of frontline interactions are essential to our understanding of how welfare services take shape when policies and rules are applied and negotiated in individual cases. The dynamics and performances of real‐time interactions have, however, rarely been analyzed as such. This study shows how the methods developed in the field of Conversation Analysis can contribute to this research. Our multi‐level approach integrates analyses of the policy‐ and institutional transformations that shape conditions for frontline interactions; and analyses of how policies and rules are evoked, negotiated and reshaped in the turn‐by‐turn organization and performances of interaction. The approach is applied on an analysis of how rules regarding financial aid are applied in an authority highly affected by changes in welfare policy towards standardization and detailed regulations. The empirical case is the Swedish Board for Study Support. The empirical study includes analyses of documents, interviews and analyses of taped telephone conversations. The study shows how institutional arrangements of standardization, detailed regulations, monitoring and depersonalization, structure the frontline work and shape narrow frames for officials' discretion in interactions with clients. The study also shows how rules are invoked and negotiated in recurrent practices in the interaction: in the careful design of decisions; in the investigations of alternatives and exceptions from the rules in order to find solutions to the client's problems. The analyses of concrete interactional practices clearly indicate that also a rule‐governed work dominated by task discretion involves recurrent negotiations, flexibility and local policy‐making.     

Actuarial Forecasts for The New National Pension Scheme in The Dominican Republic

The Dominican Republic introduced a systemic reform of the national pension scheme as from 1 June 2003, replacing the imperfect state‐run defined benefit scheme with a substitutive scheme that is privately run. The new scheme came into being on the eve of a severe economic crisis and investment restrictions on Central Bank issues led to a negative real yield of 22 per cent in its first year of operation, although a return to a positive cumulative yield was forecast for the second half of 2005. The new scheme has been unable to increase overall coverage, requires structural and operational adjustments and has not yet credited the value of capitalized recognition bonds to individual accounts. It is thus essential to allow the thousands of older members who were transferred to the funded scheme and whose pensions will be far below what they would have been under the pay‐as‐you‐go scheme to rejoin the latter if they wish to do so, as well as to take steps to improve the transparency of the annuities market and eligibility for disability and survivors' pensions.     

Social and Family Policies in Italy: Not Totally Frozen but Far from Structural Reforms

This article analyses the main shifts in the political and public discourse about families, children, elderly people, care needs and women‐friendly policies in Italy over the last two decades. It shows that while family and gender relationships have become an ideologically highly charged public issue, policies at the practical level have remained largely stagnant, marginal and fragmentary. At the same time, important institutional changes (such as the constitutional reform of 2001, which introduced a form of federalism) have created new problems of governance. The authors argue that in the face of inadequate policies, the recourse of individuals and families to old (family solidarity) and new (migrant labour) solutions may cause new tensions and inequalities.     

The welfare state as an institutional process

The main objective of this paper is to argue that the origins and formation of the welfare state should be reconsidered as an institutional process embedded in dialectical relations between given historical contingencies and institutional adaptations in response to welfare demands. Such relational processes can be categorized by the three isomorphic convergences of institutional adaptations to the welfare demands: national emergencies, economic challenges and political transitions. Existing accounts for the emergence of the welfare state – universalism, selectivity, and Marxism – are bracketed under a single heading of social control theory for two reasons: first, those three explanations commonly err in believing that an ideological intent is given as predetermined before actual analyses of social policy-making, thereby neglecting the process of institutional reforms; and second, the underlying implication of all three accounts ends in a common target of social policy – how to control welfare demands, and safeguard social stability. By comparing institutional adaptations with social control theory, the paper aims to explain and emphasize the methodological utilities and practical applicability of the institutional process approach in the studies of welfare development.     

Business political activity in New Zealand from 1990 to 2005

Abstract

This article describes the political activity of New Zealand's major business associations from 1990 to 2005. Two major themes are clearly evident in the political activity of business during this period. On one side, business vigorously opposed any perceived “rolling back” of the neoliberal policy reforms of 1984–93. On the other, business just as vigorously promoted further reforms that it considered to be in its interests, which it equated with those of the nation as a whole. Government performance in economic management and policy‐making was consistently assessed in terms of whether or not, and the extent to which, government was maintaining, advancing, or rolling back key elements of neoliberal policy reform. Two features of business political activity from 1990 to 2005 stand out: first, the extent of the neoliberal consensus over all major policy issues; and second, the marked continuity in advocating the retention and extension of the neoliberal policy regime for the entire period under review. On the basis of this investigation, the article concludes that the widespread scholarly neglect within political science in New Zealand of Marxist and neopluralist analyses of the role played by business in promoting neoliberal policy reform is unjustified.