Pension Reforms in Central, Eastern and Southeastern Europe: From Post-Socialist Transition to the Global Financial Crisis

321 Pages·2012·2.523 MB·English

by  Igor Guardiancich

ROUTLEDGE/EUI STUDIES IN THE POLITICAL
ECONOMY OF WELFARE
Pension Reforms in Central,
Eastern and Southeastern
Europe
From post- socialist transition to the
global financial crisis
Igor Guardiancich
Pension Reforms in Central, Eastern
and Southeastern Europe
This book traces and analyses the legislation and implementation of pension
reforms in four Central, Eastern and Southeastern European countries: Croatia,
Hungary, Poland and Slovenia. By comparing the political economy of their
policymaking processes, it seeks to pinpoint regularities between institutional
settings, actor constellations, decision-m aking strategies and reform.
Guardiancich employs a historical institutionalist framework to analyse the
policies, actors and institutions that characterized the period between the col-
lapse of socialism and the global financial crisis of 2008–9. He argues that viable
pension reforms should not be seen simply as an event, but rather as a continu-
ing process that must be fiscally, socially and politically sustainable. In particu-
lar, the primary goal of a pension scheme is to reduce poverty, provide adequate
retirement income and insure against the risks of old age within given fiscal con-
straints, and this will happen only if the scheme enjoys continuing political
support at all levels. To this end the author individuates those institutional
characteristics of countries that increase the consistency of reforms and lower
the likelihood of policy reversals in time.
Pension Reforms in Central, Eastern and Southeastern Europe will be of
interest to students and scholars of political science, political economy, social
policy and economics.
Igor Guardiancich earned his PhD at the European University Institute in 2009.
He is currently a post-d octoral fellow at the Collegio Carlo Alberto in Turin,
Italy.
Routledge/EUI studies in the political economy of welfare
Series editors:
Martin Rhodes and Maurizio Ferrera
The European University Institute, Florence, Italy
This series presents leading edge research on the recasting of European welfare
states. The series is interdisciplinary, featuring contributions from experts in eco-
nomics, political science and social policy. The books provide a comparative
analysis of topical issues, including:
• reforms of the major social programmes – pensions, health, social security
• the changing political cleavages in welfare politics
• policy convergence and social policy innovation
• the impact of globalisation
1 Immigration and Welfare
Challenging the borders of the welfare state
Edited by Michael Bommes and Andrew Geddes
2 Renegotiating the Welfare State
Flexible adjustment through corporatist concertation
Edited Frans van Waarden and Gerhard Lehmbruch
3 Comparing Welfare Capitalism
Social policy and political economy in Europe, Japan and the USA
Edited by Bernhard Ebbinghaus and Philip Manow
4 Controlling a New Migration World
Edited by Virginie Giraudon and Christian Joppke
5 The Moral Economy of Welfare States
Britain and Germany compared
Steffen Mau
6 Welfare State Reform in Southern Europe
Fighting poverty and social exclusion in Italy, Spain, Portugal and Greece
Edited by Maurizio Ferrera
7 Normative Foundations of the Welfare State
The Nordic experience
Edited by Nanna Kildal and Stein Kuhnle
8 Regulating New Forms of Employment
Local experiments and social innovation in Europe
Edited by Ida Regalia
9 The Politics of Post-I ndustrial Welfare States
Adapting post- war social policies to new social risks
Edited by Klaus Armingeon and Giuliano Bonoli
10 Pension Reform in Europe
Politics, policies and outcomes
Edited by Camila Arza and Martin Kohli
11 Pension Politics
Consensus and social conflict in ageing societies
Patrik Marier
12 Changing European Employment and Welfare Regimes
The influence of the open method of coordination on national reforms
Edited by Martin Heidenreich and Jonathan Zeitlin
13 The Risk of Social Policy?
The electoral consequences of welfare state retrenchment and social policy
performance in OECD countries
Nathalie Giger
14 The Politics of Containment
The role of business in shaping the welfare state and labor markets in
Germany
Thomas Paster
15 Politics of Segmentation
Party competition and social protection in Europe
Georg Picot
16 Pension Reforms in Central, Eastern and Southeastern Europe
From post- socialist transition to the global financial crisis
Igor Guardiancich

Pension Reforms in Central,
Eastern and Southeastern
Europe
From post- socialist transition to the global
financial crisis
Igor Guardiancich
First published 2013
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an Informa business
© 2013 Igor Guardiancich
The right of Igor Guardiancich to be identified as author of this work has
been asserted by him in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilized in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-i n-Publication Data
Guardiancich, Igor, 1976–
Pension reforms in Central, Eastern, and Southeastern Europe : from post-
Socialist transition to the global financial crisis / Igor Guardiancich.
p. cm. – (Routledge/EUI studies in the political economy of the welfare
state ; 16)
Includes bibliographical references and index.
1. Pensions–Government policy–Croatia. 2. Pensions–Government
policy–Hungary. 3. Pensions–Government policy–Poland. 4. Pensions–
Government policy–Slovenia. 5. Post-communism. I. Title.
HD7211.73.G83 2012
331.25'220943–dc23 2012010476
ISBN: 978-0-415-68898-7 (hbk)
ISBN: 978-0-203-09819-6 (ebk)
Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear
Contents
List of tables viii
Acknowledgements x
List of acronyms xi
List of interviewees xiii
1 Introduction 1
2 Studying pensions in post- socialist countries: a theoretical
framework 12
3 Croatia: authoritarian rule, systemic shifts and neoliberal
policies 34
4 Hungary: the negative effects of political budget cycles 81
5 Poland: how to radically rewrite the social contract 134
6 Slovenia: neocorporatist constraints and the postponement
of reforms 185
7 Comparative politics of reform: legislation,
implementation and sustainability 234
8 Conclusions: findings and the future of reforms 263
Notes 268
References 271
Index 296
Tables
2.1 Institutions, policymaking and outcomes 19
2.2 Overview of the literature on post-s ocialist pension reforms 26
2.3 Structural reform attempts (1994–2004) 30
3.1 Political institutions in Croatia 40
3.2 Party system in Croatia (after the 2007 elections) 42
3.3 Croatian executives (1990–2009) 43
3.4 Electoral systems in Croatia (Sabor) 46
3.5 Croatian trade unions and membership (2004 and latest) 47
3.6 Characteristics of the Croatian pension crisis 50
3.7 Croatian economic and pension system indicators 52
3.8 Changes in contribution rates in Croatia 54
3.9 Croatian policy compromises 62
3.10 Multipillar system in Croatia (before the financial crisis) 64
3.11 Croatian merit pensions, selected categories (1999–2010) 67
3.12 Croatian pension funds market 69
3.13 Croatian pension portfolio structure (31 December 2010) 70
3.14 The HDZ–HSU agreement 74
4.1 Political institutions in Hungary 88
4.2 Electoral system in Hungary 90
4.3 Party system in Hungary (parties represented in parliament,
1990–2010) 94
4.4 Hungarian executives (1990–2010) 96
4.5 Hungarian trade unions and membership (2003) 98
4.6 Characteristics of the Hungarian pension crisis 102
4.7 Hungarian economic and pension system indicators 103
4.8 Hungarian old- age pension contributions (1989–2010) 106
4.9 Hungarian policy compromises 110
4.10 Multipillar system in Hungary (before the financial crisis) 115
4.11 The Big Six (31 December 2009) 119
4.12 Hungarian pension portfolio structure (December 2010 and June
2011) 122
4.13 Collapse of membership in Hungarian pension funds (2011) 131
5.1 Political institutions in Poland 140
Tables ix
5.2 Electoral system in Poland (Sejm) 142
5.3 Party system in Poland (parties that won seats in the 2004
European Parliament or at the 2007 Sejm elections) 144
5.4 Polish executives (1989–2010) 146
5.5 Polish trade unions and membership (2007 and latest) 149
5.6 Characteristics of the Polish pension crisis 154
5.7 Polish economic and pension system indicators 155
5.8 Polish policy compromises 163
5.9 Polish social security contributions (2010) 165
5.10 Multipillar system in Poland (before the financial crisis) 167
5.11 Polish OFE market (December 2010) 170
5.12 Polish pension portfolio structure (31 December 2010) 170
5.13 Social part of Hausner plan 179
6.1 Political institutions in Slovenia 192
6.2 Electoral system in Slovenia (National Assembly) 193
6.3 Party system in Slovenia (after the 2008 elections) 194
6.4 Slovenian executives (1990–2009) 196
6.5 Slovenian trade unions and membership (2004 and latest) 199
6.6 Characteristics of the Slovenian pension crisis 203
6.7 Slovenian economic and pension system indicators 204
6.8 Slovenian pension insurance contributions (1989–2010) 207
6.9 Slovenian policy compromises 212
6.10 Multipillar system in Slovenia (before the financial crisis) 220
6.11 Social dialogue in Slovenia 228
7.1 Political–institutional comparison 238
7.2 Composite index of democracy 240
7.3 Comparison of pension crises 245
7.4 Eight paradigmatic reform attempts 248
7.5 Distributional and political consequences of pension reforms 256
7.6 Replacement rates 258
7.7 Gross public pension expenditure (share of GDP) 259