A risky strategy: Reflections on the World Bank Report Averting the old age crisis

This article is a critical assessment of a report on pensions recently published by the World Bank. It takes issue with the report's assertion that public pension systems have failed both socially and economically, demonstrating that many of the shortcomings identified by the World Bank apply with equal or greater force to private systems. It argues that the strategy outlined in the report, involving the replacement of social insurance by mandatory savings schemes, would involve an unacceptably high degree of risk for workers and pensioners, that it would make old-age protection more costly, and that the transition would impose a heavy burden on the current generation of workers. The article concludes that a more efficient and less disruptive approach to the provision of retirement pension would be to focus efforts on measures to rectify design deficiencies and inequities in existing schemes.     

The extension of healthcare coverage and protection in relation to the labour market: Problems and policies in Latin America

In the past 25 years almost all 20 countries of Latin America have reformed their healthcare systems, but coverage by social insurance averages 53 per cent of the total population (less than the ILO minimum standard), ranges from 7 to 26 per cent in ten countries and has stagnated or decreased in at least eight, and access is insufficient. This article (1) analyses the transformation of the labour market and its impact on social insurance coverage; describes legal coverage of various groups; estimates statistical coverage/access and its trends in the three typical sectors (public, social insurance and private); documents the differences in coverage by income, geographical area and ethnic group; examines the difficulties in the incorporation of the informal economy, the rural population, indigenous peoples and the poor, as well as the causes of low coverage, and touches problems of access;(2) summarizes recommendations from international organizations on coverage and access; suggests specific policies to expand protection in general and to vulnerable groups, and identifies themes that require more statistics and research; and (3) summarizes findings and recommendations. A preliminary version of this article was presented at the ISSA Regional Conference for the Americas held in Belize City, 28‐31 May 2006. Based on the author's book Las Reformas de Saluden América Latina y el Caribe: Su Impacto en los Principios de la Seguridad Social (Santiago, ECLAC/GTZ, 2006), the article summarizes and restructures all pertinent sections of that book, with numerous changes and new data. Useful comments were provided by two anonymous referees.     

The World Bank model for global interdependence: A quantitative framework for the World Development Report

This paper describes the basic structure of the Global Model used in preparing various parts of the World Development Report (WDR) issued annually by the World Bank. The report is designed to help clarify linkages between the international economy and the domestic strategies of developing countries. The paper is divided in four parts. The first two present different aspects of the model structure and discuss the reasons that induced the authors to orient themselves towards given functional specifications. In the final parts the policy relevance of the exercise is studied in light of the results that the model has produced for 1975–1985.     

Reforming pensions: Principles, analytical errors and policy directions

This article, sets out a series of principles for pension design rooted in economic theory: pension systems have multiple objectives, analysis should consider the pension system as a whole, analysis should be framed in a second-best context, different systems share risks differently, and systems have different effects by generation and by gender. That discussion is reinforced by identification of a series of widespread analytical errors — errors that appear in World Bank work, but by no means only in World Bank work: tunnel vision, improper use of first-best analysis, improper use of steady-state analysis, incomplete analysis of implicit pension debt, incomplete analysis of the impact of funding (including excessive focus on financial flows, failure to consider how funding is generated, and improper focus on the type of asset in trust funds), and ignoring distributional effects. The second part of the article considers implications for policy: there is no single best pension design, earlier retirement does little or nothing to reduce unemployment, unsustainable pension promises need to be addressed directly, a move from pay-as-you-go towards funding in a mandatory system may or may not be welfare improving, and implementation matters — policy design that exceeds a country's capacity to implement it is bad policy design. We illustrate the ranges of designs of pension systems that fit the fiscal and institutional capacity constraints typical at different levels of economic development. The potential gains from simplicity imply that a country capable of implementing an administratively demanding plan does not necessarily gain from doing so. New Zealand has a simple pension system through choice, not constraint.     

The creation of the ISSA and the ILO

Abstract   The creation of the International Social Security Association was strongly influenced by the International Labour Organization, clearly the rising star in the world of international organizations in the period between the two world wars. It would, however, be a mistake to think that the ILO was the only institution to make its voice heard in the establishment of the ISSA. The precursors of the two organizations, the CPIAS and the AIPLT, as well as others active at the time, such as the International Professional Association of Physicians, together with the internationalization of the social insurance movement, helped found this new association, but it faced some difficult moments in its first few years.     

Actuarial approaches to pension schemes

Do pension schemes which are referred to as “assessment schemes” or, to be more precise, those which provide for and take into account the adjustment of pensions, need the contribution of actuarial science? If so, what is its function? These questions were raised in the early 1930s by Albert Thomas, Director of the ILO, and his colleagues, especially by Adrien Tixier, Chief of the Social Insurance Section (later a Division). Since then, they have been the subject of extensive and remarkably high-level discussion. In this article, one of the people who contributed most to this discussion gives his personal answer to this question and bases it on the use of tables showing projections. Through its Permanent Committee of Actuaries and Statisticians, the ISSA has devoted great efforts to studying “demographic and financial projections in social security”. The subject remains on this Committee's programme of work and in going into it more thoroughly, the Committee proposes to limit itself to the invalidity, old-age and death risks. The present article forms part of this research work: it concentrates on schemes which provide for the adjustment of pensions.     

The free circulation of Individuals between the European Community member states: The practical implications for social security schemes

Freedom of movement in an integrated European Economic Area created the need to coordinate social security legislations by means of complex regulations. Improving their application calls for innovative solutions based on the experience of ISSA member institutions, ILO standards and the initiative of non-governmental organizations. These solutions are also of interest to institutions in states — even non-European states — linked to the Community by bilateral or multilateral conventions. The main objective is to simplify and speed up administrative procedures, notably for the award of pensions to migrants, given the desirability of identifying them and reconstructing their working careers at the earliest opportunity. Teleprocessing must gradually replace the international circulation of forms, facilitating in particular the provision of medical care during a temporary stay. Recipients'effective access to benefits can also be improved through the personal intervention of liaison offices, the use of migrants'own language and the aid of social services.     

Social security coverage extension: A review of recent evidence

This article reports the findings of 13 studies undertaken as part of the International Social Security Association (ISSA) project on “Examining the existing knowledge on coverage extension”. It reviews recent evidence that highlights how cash benefits and health‐care coverage, financed on the basis of contributions or tax revenue or both, can be extended and maintained in low‐, middle‐ and high‐income countries. The article also highlights a number of priority areas and issues for coverage extension, including realizing improved protection for informal‐economy and migrant workers.     

Assessing the World Bank Report Keeping the Promise

A new report of the World Bank released in 2004 evaluates the performance of structural pension reforms in several Latin American countries, ratifying some fundamental issues of the Bank's previous report of 1994 but contesting others, acknowledging serious problems and recommending new policies. In the light of available data from ten countries with structural reforms in the region, as well as the author's own research, this article discusses nine key elements of the new report: coverage, compliance, competition among administrators, managerial costs, capital accumulation, effects on capital and financial markets, fiscal costs, general and gender equity, and isolation from politics.     

What kind of Community measures for 1993?

During the ISSA General Assembly in Vienna in September 1989, a number of members from European Community countries expressed the wish that the ISSA should, as part of its programme, look into the social security consequences of the institution of the Single European Market after 1992. The ISSA General Secretariat consequently decided to carry out a survey of its member organizations in Community countries in order to draw up a directory of the studies carried out by these institutions, the aim being to identify problems related to the constitution of the so-called European social area, particularly the free movement of persons and goods, and review the measures that had been or were being implemented and the experience of institutions at the Community level. As a rule, in the countries in question, the heads of social security organizations are excluded from the bodies in which recommendations and rules are drawn up; on the other hand, the implementation and management of social security schemes do form part of their field of competence.
Some 40 member organizations replied to the survey questionnaire, and the ISSA General Secretariat requested Mr. Voirin, a specialist on European questions, to write the present article analysing the results.     

The ratification of ILO Conventions and the provision of unemployment benefits: An empirical analysis

This article tests the relationship between the ratification of International Labour Organization (ILO) Conventions and the provision of unemployment benefits. Statistical tests focus on two related issues: why countries ratify ILO Conventions on unemployment benefits, and whether ratification influences government spending on unemployment benefits. The main findings are that democracy, region, income, and globalization are the main factors influencing why countries ratify ILO Conventions on unemployment benefits. In turn, the ratification of ILO Conventions is systematically associated with higher spending if countries have ratified more than two Conventions.     

Minimum income in the Western Balkans: From socialism to the European Pillar of Social Rights

In this article, we examine the evolution of minimum income programmes in the Western Balkans (comprising Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia). During socialism, Yugoslavia developed a rudimentary minimum income protection programme, while Albania did not have one. As countries moved towards a market economy, socialism's legacy remained relevant, but especially since 2000, governments have taken more direct responsibility for the minimum income schemes—typically under the influence of the World Bank. The attention was paid to strict targeting accuracy rather than to adequacy or sufficient coverage of the lowest deciles. In essence, neither socialist nor neoliberal policymakers ever recognised anything but the poverty relief function of the minimum income. Both ideologies were hostile, or at best indifferent, to increasing the adequacy and generosity of minimum income programmes, perceiving them as impediments and distractions that slowed socialist and neoliberal transformations. Despite some reform initiatives supported by the World Bank and, more recently, the European Union, the generosity and adequacy of minimum income programmes remain low, and coverage keeps declining. There have been very few efforts to develop inclusion function of the minimum income, while the activation aspect has achieved very little, sometimes degrading into punitive programmes of unpaid community work. In this dismal picture, the European Pillar of Social Rights action framework could serve as a guide for a long overdue third phase in the Western Balkans' minimum income policy evolution.     

Work incapacity and reintegration: Theory and design of a cross-national study

This article presents the theory and design of a prospective cross-national study on work incapacity and reintegration with cohorts of low back pain patients from Denmark, Germany, Israel, the Netherlands, Norway, Sweden, and the United States. The aim of the project, which is being coordinated by the ISSA, is to learn how social security, labour, and healthcare systems address problems of work incapacity and reintegration and to measure and evaluate the effectiveness of various interventions, incentives, and disincentives on return to work. The article includes discussion of common problems that motivated the sponsors to join the project, the benefit programmes and services currently available in the participating countries, the theoretical model for the research, the project's core research design, and some key elements of its methodology.     

全球经济及其理论辨析

由关贸总协定、世界贸易组织、世界银行、欧共体、美洲自由贸易区等国际协定和跨国公司体现的世界经济一体化是由私有化进程和打破区域垄断的自由主义经济目标推动的不可逆转的趋势。在这一过程之中经济和经济学成了世界的结构信息。经济学的两个预设———自私自利的经济人和人的世界———非人世界的二元论是全球经济的深层理论基石。经济人的实践活动造成贫富不均 ,二元论把人溺爱成肆无忌惮地破坏环境的动物。人类应该冷静思索这一新的世界形势 ,提出合理对策     

The sensitivity of developing countries to external shocks in an interdependent world

North-South interdependence is illustrated by means of a general equilibrium model, in which the rural and urban sectors are treated entirely separately and urban real wages are downward rigid. We explain why such an approach may be more meaningful for long-run analysis than one that stresses the role of demand. The model's properties are illustrated by a theoretical analysis based on a simplified version of the system, and by simulations based on assumptions made by World Bank Staff in the 1983 World Development Report.     

The World Bank Approach to Pension Reform

This paper highlights the World Bank's thinking and worldwide involvement in pension reform. Both are driven by the Bank's mandate to help countries develop economically and to reduce poverty. The Bank has four key concerns in working with clients on pension policy: (1) short-term financing and long-term financial viability; (2) effects on economic growth; (3) adequacy and other distributive issues; and (4) political risk and sustainability. In response to these concerns and after review of the three main reform options for unfunded systems - mere PAYG reform, a rapid and complete shift to a mandatory funded system, and a gradual shift to a multipillar scheme - the Bank clearly favours the multipillar approach but in a pragmatic and country-specific manner. When helping to implement a pension reform the Bank fully takes account of country preferences and circumstances, bases its support on sound reform criteria, links the client assistance with knowledge management, provides training and other measures to enhance the reform capacity of a country, and seeks cooperation with other international institutions. In addition, the Bank has a comprehensive research agenda to improve the working of multipillar schemes, and the investigations include issues of coverage, administrative costs and annuities.     

Promoting the concept of prevention in social security: issues and challenges for the International Social Security Association1

McKinnon R. Promoting the concept of prevention in social security: issues and challenges for the International Social Security Association Int J Soc Welfare 2010: 19: 455–462 © 2009 The Author, Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. The history of the relationship between institutional social security and the concept of prevention is a chequered one. Across much of the 20th century, the imputed importance in social policy agendas accorded to prevention, alongside protection and rehabilitation, was only rarely, and somewhat inconsistently, matched in practice. Currently, efforts are underway internationally to promote the importance of the concept in social security more systematically. A key actor in this regard is the International Social Security Association (ISSA). Focusing on the role of the ISSA, the article argues against any possible endeavours, no matter how tentative, that might seek to mainstream the concept of prevention in social security, and concludes as preferable a narrower, but more vigorous, selective approach based on institutional practice to date.     

Rehabilitation Initiatives by Disability Self-help Groups: A Comparative Study

As part of its programme of activities for the triennium 1996-98, the ISSA proposed that a comparative country study be conducted on the social relevance of self-help groups and their integration into the rehabilitation process.A pilot study was conducted to assess the situation in five European countries at comparable stages of social development. Increasingly, since the Second World War, people with a chronic illness or a disability in these countries have joined together in self-help groups and organizations in order to overcome their condition together and work for better integration into society. The situation at present is that the self-help movement is no longer seen as an alternative to the regular social security system, as it used to be: instead, both the self-help groups and organizations and the institutions and facilities responsible for rehabilitation are seeking an increase in cooperation.     

Pension reform, the stock market, capital formation and economic growth: A critical commentary on the World Bank's proposals

Proposing far-reaching reforms to pension systems, the World Bank has recently suggested that the existing pay-as-you-go systems in many rich as well as poor countries should be replaced by fully funded, mandatory, preferably private pensions, as the main pillars of the new system. It argues that these reforms will not only benefit pensioners but also enhance savings, and promote capital formation and economic development. This paper provides a critical examination of the Bank's theses and concludes that it has adopted a one-sided view of the relationships between the key critical variables. The proposed reform may therefore neither protect the old nor achieve faster economic growth.     

Private Pensions — a Viable Alternative? Their Distributive Effects in a Comparative Perspective

Pension reforms have been on the political agenda of governments and international organizations like the OECD and the World Bank for some time. The strengthening of private elements in pension systems is often believed to intensify existing inequalities in the distribution of pensions among the population and to contribute to the marginalization of large groups of older people. This paper explores the distributive effects of private pensions on the basis of Luxembourg Income Study microdata for 12 industrialized welfare states. While confirming that private pensions indeed tend to produce specific inequalities, its results also emphasize the importance of policy factors in mitigating the distributive effects.