The Political Economy of Pension Reform
Edited by Martin Rein and Winfried Schmähl
Chapter 14: Latin American and East European Pension Reforms: Accounting for a Paradigm Shift
14. Latin American and East European pension reforms: accounting for a paradigm shift Katharina Müller INTRODUCTION Twenty years after the iconoclastic Chilean reform, half of all Latin American countries had introduced compulsory individually fully funded (IFF) schemes that either compete with, replace or complement the existing public pay-as-you-go (PAYGO) schemes.1 Another wave of pension privatizations has been taking shape in Eastern Europe and the Former Soviet Union.2 This move, that has been referred to as ‘structural’ or ‘systemic’ pension reform, implies a fundamental paradigmatic departure from the previous pension system. It amounts to a shift from an intergenerational contract to individual provision for old age, as well as from the state to the market as the main supplier of retirement pensions. The paradigm change inherent in radical pension reform therefore amounts to a substantial rewrite of the underlying social contract, which is particularly remarkable as pension systems were long thought diﬃcult to reform.3 This puzzle has triggered multidisciplinary research over the past few years.4 Interestingly, however, the similarity of pension reform approaches in Latin America and Eastern Europe has prompted little cross-regional analysis so far. In this chapter, pension privatization in both regions will be analysed comparatively, in an attempt to explore the similarities and diﬀerences in Latin American and East European pension policy. FROM BISMARCK TO FRIEDMAN: STRUCTURAL PENSION REFORM IN LATIN AMERICA The origins of Bismarckian-style pension schemes in Latin America can be traced back to the ﬁrst decades of the twentieth century.5 Coverage and...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.