Exchange rate and wage policies in Central and Eastern Europe

After the eastern enlargement of the European Union (EU) and due to increasing labor market integration, wage determination in Central and Eastern Europe (CEE) has become a key issue in European economic policy making. In addition, a controversial discussion concerning the monetary integration of CEE countries into the EMU has emerged. Both issues have earned particular academic and political interest because Eastern and Western Europe are at different stages of economic development and volatile international capital flows seem to require either a higher degree of wage or exchange rate flexibility. Based on the Scandinavian model of wage adjustment by Lindbeck (1979), we analyze the role of exchange rates in the wage determination process of the Central and Eastern European countries to identify which exchange rate strategy contributes to faster wage convergence in Europe. Panel estimations suggest that workers in countries with fixed exchange rates are likely to benefit in the long run from higher wage increases.     

Poverty and deprivation among children in Eastern Europe and Central Asia

Although there is now a large body of literature on poverty in the countries of Eastern Europe and Central Asia, there remains a dearth of comparative analysis of child poverty and wellbeing. This article uses household survey microdata for the period 2001–2003 to compare absolute poverty, relative poverty, material deprivation and participation in schooling among children in five countries: Albania, Bulgaria, Moldova, Russia and Tajikistan. The analysis shows that low absolute levels of household consumption are associated with other deprivation indicators and with children's participation in schooling. The article also highlights the usefulness of relative poverty measures that effectively identify children at risk of exclusion in even the poorest countries in the region. The article concludes by arguing that household consumption is a good indicator of child poverty and deprivation in the region, and that relative poverty measures should be more widely used in monitoring global targets for poverty reduction.     

Second‐pillar pensions in Central and Eastern Europe: Payment constraints and exit options

During 1998–2007, a majority of Central and Eastern European (CEE) governments enacted laws obligating workers to save for retirement in privately managed individual accounts. The governments funded these accounts with a portion of public pension revenues, thus creating or increasing deficits in public systems. After the onset of the global financial and economic crisis (2008), most CEE governments reduced these funding diversions and scaled back the accounts. Now, a decade after the crisis, this article examines the benefits that the accounts are beginning to pay retiring workers. In general, these benefits are shown to be disadvantageous compared with public pensions. Some pay lump sums in lieu of regular monthly benefits, most fail to adjust pensions regularly for inflation, and some pay women less than men with equal account balances. In several countries, pensioners with individual accounts receive lower benefits than those without them. To enable retiring workers to avoid these disadvantages, several CEE governments have allowed them to refund their account balances and receive full public pensions. Yet while this strategy diffuses worker dissatisfaction, it also places strains on public pension finance. To assist second‐pillar account holders without weakening public pensions, governments should consider making private pension savings voluntary and financing these schemes independently of public pensions – i.e. by worker and employer contributions and, possibly, direct state support.     

Trust and health in Eastern Europe: Conceptions of a new society

Little attention has been paid to why trends and levels of mortality and morbidity differ in Eastern Europe and few studies have addressed people's own perceptions of their new political system – perceptions which per se may be important for social development. The aim of the present study was to analyse the extent to which trust and economic circumstances affect self‐rated health in Poland, Estonia and Russia and how much health differences between the countries can be explained by these factors. A better economy and higher trust were related to better individual health, while economic factors seemed most important for inter‐country differences. It is probable that both institutional factors and individual perceptions contribute to people's well‐being, but in terms of social policy, an improved welfare system may be the most effective way forward.     

Hybridization instead of Clustering: Transformation Processes of Welfare Policies in Central and Eastern Europe

Welfare state theories tend to use concepts of clustering for defining the affiliation of national social security systems to overarching worlds of welfare. A closer look at the transformation processes of welfare policies in Central and Eastern Europe shows a great variability among those countries in approximating their welfare states to Western European standards. In the design of their pension systems, their health care provision and their unemployment protection, Central and Eastern European Countries (CEEC) follow different reform paths. Welfare clusters in Western Europe are used as reference models, but no single example applies to all sectors of social security. Thus, a generalizing picture of welfare provision cannot be drawn for Central and Eastern Europe. Instead of constituting a new individual type of welfare arrangement, a hybridization process is observable.     

Rural Movements in Europe: Scandinavia and the Accession States

This paper explores the national rural/village movements now established in some 16 European countries, with special focus on those in Scandinavia and Eastern Europe. The aim of the paper is to raise awareness by providing information on the significance of rural social movements, rather than to attempt a detailed analysis. Starting in the 1970s in some Scandinavian and Western European countries, as a local community response to rural decline, the village movements have built into major national forces, and have recently expanded into the EU accession states in Central and Eastern Europe. They were established to address issues of rural decline, agricultural change, migration, centralization and EU accession. They are now also organizing themselves at EU level, to provide a voice for rural communities in Europe. This is a notable example of a structured approach to mobilizing rural communities to become stronger agents of local development and to participate in rural policy‐making at local, regional, national and EU levels. The paper draws on information gained in a recently completed initial investigation of the national village movements in Estonia, Finland, Slovakia and Denmark, together with information from Sweden. The information is based on that gathered from a wide range of interviews and the minimal documentation available from the movements themselves. The experiences of the movements in enabling local structural development, capacity‐building, empowerment and action are documented, as is their work to develop strategic planning and advocacy. The paper identifies the motivating forces, structural and process models, activities and outcomes of the different movements. It takes account of the effects of differing national contexts, and identifies some key elements of experience and learning.     

A call for more elaborate and transparent pension data to inform policy‐making: A critical examination of World Bank data for Eastern Europe

This article offers a critical analysis of the methods by means of which data relating to the performance of second pillar pension schemes are collated, compared and reported. This is done with regard to the performance of mandatory private second pillar pension funds in Eastern Europe. By critically examining data published in a number of World Bank studies, and through the identification of data problems and irregularities, the article argues that a much more elaborate and transparent approach to the collation, comparative analysis and reporting of data is needed. Required is the establishment of a consensus regarding what should represent a robust basis for making credible policy recommendations, not least with regard to pension re‐reforms in the countries of Eastern Europe and elsewhere. In the absence of such a consensus, unresolved data problems and irregularities may potentially continue to influence the formulation of incomplete national policy conclusions regarding the performance of second pillar pension funds and, in turn, the ability of policy‐makers to evaluate appropriately the need for, and assess the feasibility of implementing in a sustainable manner, pension re‐reform.     

Regulating the delivery of cash‐for‐care payments across Europe

The article aims to understand how governments across Europe have modified the regulation of the delivery of cash‐for‐care schemes (CfCs) to dependent older people since the beginning of the century. In our terminology, the regulation of the CfCs delivery defines the norms, rules, and practices that public actors adopt to manage how beneficiaries can use the benefits. To discuss the regulation of CfCs delivery, we employ an original framework that take three analytical dimensions into account: the degrees of freedom in benefits' utilization (“CfCs utilization” dimension), the provision of information/orientation/advices/counselling to older people and families (“professional support” dimension), and the relationship between the delivery of CfCs and the delivery of the other publicly funded long‐term care inputs (“care system” dimension). The analysis adopts a comparative perspective, looking at six countries—Italy, Austria, the Netherlands, France, Germany, and England. Among various findings, the main one consists in showing that there has been a shared and increased interest in consolidating the regulation of CfCs delivery. This trend has been mostly directed towards the new policy aim of strengthening the professional support, a goal underestimated in the past, when this dimension was not a major topic of both debate and practice concerning CfCs across Europe.     

前车之覆 后车之鉴——对苏东前社会主义国家改革失败原因与教训的再认识

苏东前社会主义国家的改革前后经历40余年,出现了三次浪潮,在取得巨大成就的同时却犯下了严重错误,最终走向失败.这主要是由于其实行了错误的改革路线,党内特权、腐败现象也导致了民心丧失,最终使改革失去了群众基础,同时也是西方敌对势力推行"和平演变"战略的结果.现有社会主义国家尤其是我们中国要吸取其教训,从改革的指导思想、策略原则、和谐环境构建等方面取得突破,确保改革顺利进行.     

Cash for long‐term care: Policy debates,visions, and designs on the move

Cash‐for‐care (CfC) schemes have introduced a key transformation in long‐term care policies across Europe since the 1990s. The article explores the extent to which CfC policies have changed over time and into which directions, the ways in which change (if any) has occurred and the forces underlying it. By combining the literature on institutional change with ideational approaches, the article focuses on policy theories and policy designs, on modes of change and factors pushing for change within the CfC policy, and in the long‐term care and neighbouring policy fields. In doing so, we aim to contribute to understanding institutional change and the transformation of an increasingly important sector of the welfare state.     

Pension reforms in EU11 countries: An evaluation of post‐socialist pension policies

This article evaluates the pension policy pathways of the 11 former state socialist nations that have joined the European Union since 2004. Focusing primarily on the post‐2004 period, the analysis discusses the most important measurable outcomes of these countries’ pension reforms, in terms of poverty alleviation, pension adequacy and fiscal sustainability. Going beyond the quantifiable concepts, we also investigate the quality of the 11 countries’ pension systems in terms of equity as well as efficiency, emphasizing the less conspicuous design errors present in these systems. Although these errors have received little attention to date, they may harm pension schemes along several dimensions, including their fiscal sustainability.     

论"三个代表"与苏东剧变的经验教训

苏东剧变的根本原因是,执政党在推动先进生产力发展方面多有失误、少有作为,致使人民群众得不到切实的经济政治文化利益;执政党背离了人民的根本利益,同时又推行了思想多元化,放弃了马克思主义的指导地位.我们党取得社会主义建设巨大成就的根本原因是推动了先进生产力的发展,使人民群众获得了切实的经济政治文化利益,并始终坚持了马列主义、毛泽东思想和邓小平理论的指导.鲜明的对比表明推动先进生产力发展是党保持先进性的物质基础;代表中国先进文化的前进方向是党保持先进性的思想基础;代表人民的根本利益是党的本质要求.     

A macro‐financial analysis of pension system reforms in emerging Europe: The performance of IRAs and policy lessons for Serbia

The article explores the initial macro‐financial performance of partial pension system “privatizations”— involving privately‐managed individual retirement savings accounts (IRAs) — undertaken in many emerging European countries. Using empirical data for a period of close to a decade, the evidence shows that returns on privately‐managed IRAs have been below the implicit rate of return of public pay‐as‐you‐go (PAYG) systems. High operating costs and undeveloped capital markets are identified as major contributing factors to the failure of privately‐managed IRAs to meet reform expectations. In light of empirical evidence, Serbia is advised to focus on parametric PAYG reforms and to avoid reforms that involve the partial “privatization” of the pension system.     

Democracy and poverty: The implementation of social reforms in the countries of central and eastern Europe

Why has the political and economic transformation in Russia and central and eastern Europe been accompanied by deteriorating living standards? Many of the reform programmes have contained social elements, but these have been neglected in the implementation process. Certain barriers to change – mental, cultural, political and economic – have made the implementation difficult. Russia and central and eastern Europe have to pass through a problematic dual transformation, from authoritarianism to democracy and from centrally planned economies to market economies. Experiences from Latin America show that such transitions are virtually impossible. The social results from the transformations in central and eastern Europe have been disappointing, which has been documented by scholars in this field. Nevertheless, if the political and economic transformation processes continue, the prospectes for the future are relatively bright. But there is also a negative scenario with authoritarianism and civil war as endpoints. A more cautious transition to a market economy might improve social welfare and living standards.     

Contextualising institutional complementarity. How long‐term unemployment depends on employment protection legislation,active labour market policies and the economic climate

This study investigated if and how active labour market policies (ALMPs) and employment protection interact with each other in light of long‐term unemployment reduction. We argue that how well the interaction between both labour market institutions reduces long‐term unemployment depends on the level of economic growth. To improve analytical clarity, two types of ALMPs were differentiated, namely training and employment programmes. Using data on 20 European countries over 16 years, our results suggest that employment protection moderates the relationship between employment programmes and long‐term unemployment. The combination of high spending on employment programmes and less strict employment protection is associated with less long‐term unemployment. This moderation effect is stronger during an economic downturn. A moderation effect from employment protection on the relationship between training programmes and long‐term unemployment was not found, even when the economic climate was taken into account as a contextual factor.     

Social investments in the knowledge economy: The politics of inclusive,stratified, and targeted reforms across the globe

As countries transition from industrial to post-industrial knowledge economies, education and skills are crucial. Consequently, policy-makers around the globe have increasingly focused on social investment, that is, policies aiming to create, mobilize, or preserve skills. Yet, countries around the globe have developed social investments to different degrees and in highly different forms. Our goal is twofold: First, we introduce a new typology of social investment policies, distinguishing nine types along two dimensions: three distributive profiles (inclusive, stratified, targeted) and three functions (skill creation, preservation, mobilization). This differentiation allows fine-grained analyses of the causes and consequences of different kinds of social investments, thus offering a perspective to study the relationship between efficiency and inclusiveness in a way that goes beyond the mere discussion how social investment policies grosso modo affect inequalities (‘equalizing’ versus ‘Matthew Effects’). Second, we theorize on the politics of social investment. We argue that the interaction of policy legacies and socioeconomic factors is the main explanation for which functions of social investment policies are introduced, whereas their distributive profiles are crucially shaped by political coalitions. We illustrate with empirical material from democracies around the globe.     

Contradictory Logics in Asset‐building Discourse: Habits,Identities and Discipline

Asset‐building as an anti‐poverty policy emphasizes helping the poor to save and accumulate wealth so as to promote future financial well‐being. This article focuses on how asset‐building discourse is practiced at the frontlines and its implications for how workers come to address issues of poverty. Drawing on qualitative data from a case study of a matched savings programme in the USA, the study finds that asset‐building discourse as enacted by workers is fundamentally contradictory: it promotes the idea that the poor can acquire financial literacy, but simultaneously works to discipline the poor to thoughtlessly save out of habit. More priority is placed on inculcating the habit of saving rather than teaching economically rational decision‐making. These findings indicate that asset‐building is consistent with a neo‐liberal outlook that focuses on disciplining the poor to be market compliant irrespective of whether their participation in market‐based activities effectively addresses the challenges of living in poverty.     

The turn to optional familialism through the market: Long‐term care,cash‐for‐care,and caregiving policies in Europe

Cash‐for‐care (CfC) schemes are monetary transfers to people in need of care who can use them to organize their own care arrangements. Mostly introduced in the 1990s, these schemes combine different policy objectives, as they can aim at (implicitly or explicitly) supporting informal caregivers as well as increasing user choice in long‐term care or even foster the formalization of care relations and the creation of care markets. This article explores from a comparative perspective, how CfC schemes, within broader long‐term care policies, envision, frame, and aim to condition informal care, if different models of relationships between CfC and informal care exist and how these have persisted or changed over time and into which directions. Building on the scholarly debate on familialization vs. defamilialization policies, the paper proposes an analytical framework to investigate the trajectories of seven European countries over a period of 20 years. The results show that, far from being simply instruments of supported familialism, CfC schemes have contributed to a turn towards “optional familialism through the market,” according to which families are encouraged to provide family care and are (directly or indirectly) given alternatives through the provision of market care.     

Narrowing of Public Responsibility in Finland, 1990–2010

Public responsibility in Finland has narrowed in the last 20 years while the sphere of the private sector has been increased. The economic crisis of the early 1990s was not the cause, but an accelerator of public sector/welfare state retrenchment in Finland. Based on which, it was easy for the advocates of neo‐liberal reforms to argue that the changes were a must. The welfare state programmes however, are popular among the Finnish population and therefore large one‐time cutbacks have not been possible beyond the immediate aftermath of the economic crisis. This article looks into three different methods through which the Finnish welfare state has been gradually cut since then: (1) by not raising income transfers along with the rising cost of living and wages; (2) by reducing funding of public services; and, on the other side of the coin (3) through regular tax cuts contracting the revenue side. Welfare state retrenchment in Finland has therefore been achieved in a subtle fashion through slow gradual weakening of social programmes on one hand, and through cuts in revenue on the other that have left proportionally more in the hands of the wealthier. These combined movements have resulted in a drastic reversal in the trend in income inequality in Finland.     

Racist attitudes,out‐groups and the Australian experience

Australia today is a culturally diverse nation with people from over 190 different countries claiming 300 different ancestries. But despite an official commitment to diversity, contemporary Australian society continues to experience tensions between multicultural policies and a legacy of Anglo privilege and cultural dominance. To assess this, the Challenging Racism Project conducted a national survey, commissioned by the Special Broadcasting Service, to gauge the nature and extent of racist attitudes and experience of racism across Australia during July–August 2015 and November 2015. Results show that sociodemographic characteristics show little contemporary relationship to racist attitudes. Age, once associated with “old” racist attitudes, is no longer significant. On the other hand, Anglo privilege is empirically linked to racism through notions of social dominance. We conclude that it is to the media, and to public discourse generally, to which future research attention, using critical discourse analysis, should turn in efforts to make Australia a fairer, more tolerant, multicultural society.