The Political Economy of Pension Reform
Edited by Martin Rein and Winfried Schmähl
Chapter 11: Home-made Pension Reforms in Central and Eastern Europe and the Evolution of the World Bank Approach to Modern Pension Systems
Michal Rutkowski One of the most interesting elements of a wave of pension reforms in Central and Eastern Europe is that those reforms were home-made: very diﬀerent from the Chilean prototype, and not really following what was then perceived as ‘the World Bank view’, that is, promoting a Chilean-type reform as a blueprint in all client countries.1 The World Bank played a certain role in the reform process; however, the views espoused by the Bank were simply diﬀerent from those commonly believed. The ﬁrst section of this chapter describes the views of the Bank, especially the transition from the research report, ‘Averting the Old-Age Crisis’ (World Bank, 1994) to ‘World Bank Position on Pension Reforms’ (edited by Robert Holzmann, in preparation). The second section examines pension reform developments in Central and Eastern Europe (CEE), especially in Hungary and Poland, in the light of those changes in the prevailing approach to pension reforms. EVOLUTION OF VIEWS ON PENSION REFORMS The World Bank has always supported a strong funded pillar as part and parcel of a fully reformed scheme. However, the approach of the Bank in the late 1990s had more nuances and actual reform design and implementation were made dependent on country circumstances and preferences. With its 1994 publication, the Bank developed arguments for a multipillar pension system. The proposed model system consisted of a mandated unfunded and publicly managed deﬁned beneﬁt scheme as a ﬁrst pillar, a mandated but funded and privately managed deﬁned contribution...
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