The Reform of Bismarckian Pension Systems: A Comparison of Pension Politics in Austria, France, Germany, Italy and Sweden (Amsterdam University Press - Changing Welfare States Series)

312 Pages·2006·1.77 MB·English

by  Martin Schludi

cover.schludi.qxp 15-06-2005 10:24 Pagina 1
Martin Schludi
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Pension reform has emerged as a major political issue in most h
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advanced welfare states. Low economic growth and rising u n A Comparison of Pension
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unemployment have put public pension systems under strong i g
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pressure. Combined with a rapidly ageing population in the a Politics in Austria, France,
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decades to come, these pressures render adjustments in pen- c
sion policy design inevitable. However, timely and successful Germany, Italy and Sweden
adjustment is anything but guaranteed. Pension politics these
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changing demographic and economic conditions as it is

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This study reveals striking differences in the extent to which o
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pension reform outcomes run the gamut from the successful f

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restructuring of the existing pension arrangements all the
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social policy reforms in the context of fiscal austerity.

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Martin Schludi works at the Institut für Arbeitsmarkt- und
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Berufsforschung in Nuremberg, Germany. o
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Amsterdam University Press s
A m s t e r d a m U n i v e r s i t y P r e s s
the reform of bismarckian pension systems
CHANGING WELFARE STATES
Processes of socio-economic change −individualising society and globalising eco-
nomics and politics − cause large problems for modern welfare states. Welfare
states, organised on the level of nation-states and built on one or the other form of
national solidarity, are increasingly confronted with − for instance − fiscal prob-
lems, difficulties to control costs, and the unintended use of welfare programs. Such
problems – generally speaking – raise the issue of sustainability because they tend
to undermine the legitimacy of the programs of the welfare state and in the end in-
duce the necessity of change, be it the complete abolishment of programs, retrench-
ment of programs, or attempts to preserve programs by modernising them.
This series of studies on welfare states focuses on the changing institutions and
programs of modern welfare states. These changes are the product of external pres-
sures on welfare states, for example because of the economic and political conse-
quences of globalisation or individualisation, or result from the internal, political
or institutional dynamics of welfare arrangements.
By studying the development of welfare state arrangements in different countries,
in different institutional contexts, or by comparing developments between coun-
tries or different types of welfare states, this series hopes to enlarge the body of
knowledge on the functioning and development of welfare states and their pro-
grams.
EDITORSOFTHESERIES
Gøsta Esping-Andersen, University of Pompeu Fabra, Barcelona, Spain
Anton Hemerijck, the Netherlands Scientific Council for Government Policy
(Wetenschappelijke Raad voor het Regeringsbeleid −WRR)
Kees van Kersbergen, Free University Amsterdam, the Netherlands
Jelle Visser, University of Amsterdam, the Netherlands
Romke van der Veen, Erasmus University, Rotterdam, the Netherlands
PREVIOUSLYPUBLISHED
Jelle Visser and Anton Hemerijck, A Dutch Miracle: Job Growth, Welfare Reform
and Corporatism in the Netherlands, 1997(ISBN9053562710)
Christoffer Green-Pedersen, The Politics of Justification: Party Competition and
Welfare-State Retrenchment in Denmark and the Netherlands from 1982 to
1998, 2002(ISBN9053565906)
Jan Høgelund, In Search of Effective Disability Policy: Comparing the Develop-
ments and Outcomes of the Dutch and Danish Disability Policies, 2003 (ISBN
9053566449)
Maurizio Ferrera and Elisabetta Gualmini, Rescued by Europe? Social and Labour
Market Reforms from Maastricht to Berlusconi, 2004(ISBN9053566511)
Uwe Becker and Herman Schwartz (eds.), Employment ‘Miracles’: A Critical Com-
parison of the Dutch, Scandinavian, Swiss, Australian and Irish Cases versus
Germany and the US, 2005(ISBN9053567550)
The Reform of Bismarckian
Pension Systems
A Comparison of Pension Politics in Austria,France,Germany,
Italy and Sweden
Martin Schludi
amsterdam university press
Cover illustration: Ferdinand Hart Nibbrig (1866-1915), ‘Oude Zeeuwen’, 1911
Cover design: Jaak Crasborn bno, Valkenburg a/d Geul
Lay-out: Adriaan de Jonge, Amsterdam
isbn9053567402
nur754
© Amsterdam University Press, Amsterdam 2005
All rights reserved. Without limiting the rights under copyright reserved above, no
part of this book may be reproduced, stored in or introduced into a retrieval sys-
tem, or transmitted, in any form or by any means (electronic, mechanical, photo-
copying, recording or otherwise) without the written permission of both the copy-
right owner and the author of the book.
Table Of Contents
Listof Tables/Listof Figures 6
Acknowledgements 7
Introduction 9
1 The Need for Pension Reform:A Problem-Oriented Perspective 13
1.1 Public pension arrangements under adaptational pressures 13
1.2 Specific vulnerabilities of Bismarckian pension systems 16
1.3 Options for reform 20
1.4 Varying degrees in the need for adjustment 43
2 An Empirical Overview of Policy Change in Bismarckian Pension
Regimes 51
3 The Politics of Pension Reform:An Actor-Centred Explanatory
Framework 59
3.1 Social policymaking in an era of retrenchment: A review of
theoretical approaches 59
3.2 The concept of actor-centred institutionalism 65
3.3 The politics of pension reform 68
3.4 Summary of the theoretical framework 86
4 Sweden:Policy-Oriented Bargaining 89
5 Italy:CorporatistConcertation in the Shadow of EMU 109
6 Germany:From Consensus To Conflict 129
7 Austria:Reform Blockage by the Trade Unions 165
8 France:Adverse Prerequisites for a Pension Consensus 191
9 Conclusion 219
Appendix I Summary Description of RetirementSystems (1986) 249
Appendix II Chronology of National Pension Reforms 259
Appendix III Glossary of Terms 269
Notes 273
Bibliography 289
Index 307 5
Listof Tables
1.1 Replacement rate of public pension programmes
1.2 Advantages and disadvantages of various pension reform options on the
revenue side
1.3 Advantages and disadvantages of various pension reform options on the
expenditure side
1.4 Strengths and weaknesses of pay-as-you-go versus fully funded schemes
1.5 Strengths and weaknesses of various options to encourage supplementary
old age provisions
1.6 Selected indicators for the magnitude of challenges in pension policy in
the 1990s
2.1 Change in public pension expenditures between 1993and 1999
2.2 Estimated change in pension expenditures according to different projec-
tions (in percentage of gdp)
2.3 Private pension benefits as a percentage of gdp
3.1 Likelihood of a partisan consensus on pension reform
4.1 Chronology of the “big” Swedish pension reform
6.1 Projected contribution rates for statutory pension insurance
6.2 Change in vote shares between the federal elections of 1994and 1998
6.3 The German pension reform 2001: The major stages of the reform process
7.1 Share of trade union functionaries in the Austrian parliament
7.2 Cost containment effects of recent Austrian pension reforms
7.3 Union influence on political decision making in Austrian pension policy
8.1 The basic structure of the French pension system
8.2 Projected development of the equilibrium contribution rateto the general
regime before and after the 1993reform
8.3 Projections of gross replacement rates for three typical cases
9.1 Political support of pension reforms and passage of legislation
9.2 Factors influencing union bargaining power vis-à-vis the government
Listof Figures
3.1 The theoretical framework of actor-centred institutionalism
3.2 Goals of political parties
3.3 Policy positions towards pension reform in the context of demographic
ageing and fiscal austerity
3.4 Sequential game between government, opposition and voters
3.5 Bargaining constellation between government and trade unions
6
Acknowledgements
I am particularly grateful to Karen Anderson, Lucio Baccaro, Guiliano
Bonoli, Agar Brugiavini, Bernhard Ebbinghaus, Maurizio Ferrera, Steffen
Ganghof, Antonia Gohr, Christoffer Green-Pedersen, Miriam Hartlapp,
Markus Haverland, Martin Hering, Karl Hinrichs, Ellen Immergut, Matteo
Jessoula, Sven Jochem, Herbert Kitschelt, Bernhard Kittel, Anders Lind-
bom, Margitta Mätzke, Bruno Palier, Edward Palmer, Birgitta Rabe, Anika
Rasner, Bo Rothstein, Fritz Scharpf, Isabelle Schulze, Eric Seils, Christian
Toft, Christine Trampusch, Axel West Pedersen and Harold Wilensky for
their constructive criticism and useful hints.
June 2005
Martin Schludi
7
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Introduction
The 1990s have been a decade of fundamental challenges to the European
welfare states. Rising unemployment has put them under growing financial
pressure, while unrestricted international capital mobility and intensified
international competition have rendered existing welfare state commit-
ments increasingly costly. Moreover, the legally binding criteria of the
Maastricht Treaty have forced most European governments to adopt tight
budgetary policies. The ageing of the population in virtually all European
countries over the next decades will reinforce these pressures even further.
Due to these developments, the reform of the welfare state figures promi-
nently on the political agenda of all European governments. As Bonoli
(2000) has argued, welfare retrenchment is no longer an Anglo-Saxon idio-
syncrasy. However, the process of welfare state restructuring has been ac-
companied by severe political and societal conflicts. Powerful pressures for
cost containment collide with equally powerful forces defending existing
welfare state arrangements. This struggle also left its imprint on the schol-
arly debate about the welfare state. One strand of current welfare state
research emphasises the profound alteration of traditional social policy pro-
grammes in response to the above-mentioned pressures and points to the in-
evitability of welfare retrenchment under changed economic conditions.
Another strand diagnoses a remarkable resilience of the welfare state and
highlights the political difficulties of carrying out retrenchment policies.
This academic dispute is unlikely to be settled at a general level. In recent
years, numerous authors have contributed to this debate and put forward a
variety of theoretical propositions about the factors which facilitate or im-
pede welfare retrenchment. While the empirical findings emerging from this
body of literature are still rather inconclusive, a strong case can be made
that the degree of social policy retrenchment and welfare restructuring ap-
pears to be highly contingent. In this respect, we can divide the existing ex-
planatory approaches in the retrenchment literature into at least three broad
categories. One strand of explanation focuses on the strength of adapta-
tional pressures arising from external constraints on welfare state policy as
9