Adapting private pensions to public purposes: historical perspectives on the politics of reform

Abstract:

This paper compares how extensions of pension rights were developed and implemented in major European economies in the decades following the Second World War. Governments in Sweden, France, Germany, the Netherlands and Britain adapted earnings-related systems as a common policy agenda to meet rising public demand for more generous pension provision. However, this generated divergent policy pathways as a common approach became translated through different institutional mechanisms and different conventions of governance - the points at which states could legitimately intervene to secure policy goals. In consequence, divisions between public and private pension provision (and the boundaries of welfare states) were blurred by the emergence of institutional hybrids. Neither state nor market, these developed in continental Europe as negotiated compromises that fostered social representation in the management of collective provision under various forms. By contrast, in the UK such governing conventions were absent and, hence, the division between public and private has proved more deep-rooted. Historical precedent suggests that current pressures towards private pension solutions cannot but produce another compromise in the form of a public-private hybrid to reconcile financial imperatives with popular demands for pension security.