Über die Autorin bzw. den Autor

Mitchell A. Orenstein is the S. Richard Hirsch Associate Professor of European Studies at Johns Hopkins University. His books include Out of the Red: Building Capitalism and Democracy in Postcommunist Europe.

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"In this carefully crafted, comprehensive study, Mitchell Orenstein provides a persuasive analysis of the significance of transnational policy actors in pension privatization around the world. The empirical evidence is strong and the theoretical framework is applicable to a wide range of social policy issues. The book presents an important challenge to state-centric perspectives, as well as many of the interest-based assumptions of political economy approaches. This is a first-rate study which deserves attention from both academic and policy-oriented audiences."--Robert R. Kaufman, Rutgers University

"An innovative investigation into the role of transnational actors in national pension policy. Orenstein argues convincingly that transnational actors matter but that they need to be more broadly defined and their influence not reduced to money or coercion. They work through various channels, most importantly through the power of ideas, adaptability to country circumstances, learning from experience, and building coalitions with other transnational and domestic actors. The proposed conceptualization constitutes a major progress in this area."--Robert Holzmann, World Bank

"An excellent book that makes a significant theoretical contribution, and supports it with a great deal of solid empirical research. Orenstein demonstrates that decision making in a crucial area of domestic policy--namely pension system reform--is strongly influenced by transnational policy actors. His argument is novel and important."--Kurt Weyland, University of Texas, Austin

"This is a thoughtful and well-researched book on an important topic. Orenstein argues that international actors--including but not limited to the international financial institutions--exert influence in complex and multifaceted ways on domestic policy processes. The book is the best I know in making this case."--Stephan Haggard, University of California, San Diego

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Privatizing Pensions

By M.A. Orenstein

Princeton University Press

Copyright © 2008 Princeton University Press
All right reserved.
ISBN: 978-0-691-13697-4

Introduction

Most Americans know of President George W. Bush's 2005 proposals for new pension reforms to privatize Social Security, but few are aware of a conversation that took place on September 11, 1997, between then Texas Governor Bush and Jos Piera, a former Chilean Secretary of Labor and Social Security. Piera is an internationally known advocate of private, individual pension savings accounts who led the effort to replace Chile's social security system with individual accounts in the late 1970s and early 1980s under the regime of General Augusto Pinochet. Pinochet's regime was highly controversial-as reviled by the left for its human rights abuses as it was lauded by the right for setting Chile on a course to strong economic growth and ultimately to democracy. After planning pension reform in Chile, Piera made a career of spreading pension privatization throughout Latin America and worldwide. He met personally with numerous Latin American presidents as they contemplated reforms to their pension systems and advised organizations such as the World Bank and state officials in countries around the world (see Oravec 2006, 28-43, for a detailed account of his work in Slovakia). Piera's meeting with President Bush took place at the governor's residence in Austin. Piera portrayed pension privatization as a crucial element of an ownership society and helped to convince President Bush to embark on what now looks like a quixotic campaign to restructure Social Security and enact new pension reforms in the United States based on the Chilean model. Bush's campaign for pension privatization cost him a good portion of the political capital he gained in his 2004 re-election campaign and helped to send his popularity ratings plummeting in 2005. Given the high price he paid, it seems that President Bush acted out of conviction on this issue-a conviction that grew in part out of his meeting with Chile's pension reform guru.

This book analyzes the role of transnational policy actors in spreading pension privatization ideas and practices worldwide. Transnational policy actors are defined broadly as organizations (multilateral, state, or non-state) or individuals that seek to develop and advocate well-elaborated policy proposals in multiple national contexts. Through a detailed study of the privatization of state social security systems, this study seeks to answer several fundamental questions: Are national policy makers influenced by transnational policy actors who sell policy ideas from country to country? How much influence do transnational actors have on policies such as pension reform that have long been dominated by powerful domestic interest groups? If transnational actors are important, how are they important? What are the sources of their influence and when do they exert it?

This book addresses these questions by exploring the spread of pension privatization, which I also refer to as the new pension reforms, a set of policy reforms that have radically altered the post-war domestic social contract in more than thirty countries around the world. Pension privatization involves the partial or full replacement of social security type pension systems by ones based on private, individual pension savings accounts. Transnational policy actors, including the World Bank, the U.S. Agency for International Development (USAID), and other multilateral and bilateral aid agencies, transnational policy entrepreneurs, and expert networks, have been deeply involved in the development, diffusion, and implementation of these reforms. While pension privatization has affected mostly middle-income developing countries, these reforms also have been implemented in Sweden and the United Kingdom and proposed in the United States as well as in other developed countries.

Pension privatization represents an important example of the internationalization of public policy making in an area that I have had the opportunity to observe at close quarters over a number of years. In 1998, when I was invited to join a World Bank political economy research team investigating the politics of pension privatization in Europe, Central Asia, and Latin America, I found myself working among a core group of pension experts at the Bank who were advocating pension privatization in all corners of the earth. As a result of participating in a research project on the politics of pension reform worldwide, I had a unique opportunity to interview leading officials involved in pension reform processes in countries around the world. In 1999, I participated in a conference at the World Bank convened by then chief economist Joseph Stiglitz to critique and discuss the World Bank model for pension reform. This provided an opportunity to experience important debates within the Bank over pension privatization first hand. I later helped to edit a 2003 book, Pension Reform in Europe: Process and Progress, that brought together the results of a 2001 expert conference on the political economy of pension reform in Europe. This conference, sponsored by the World Bank, the International Institute for Applied Systems Analysis, and the government of Austria, was attended by scholars of the political economy of pension reform as well as pension officials from across the European Union 27 and a variety of international organizations. Between 1998 and 2004, I produced thorough case studies of pension reform in a number of Central and East European countries and Peru, conducting interviews with dozens of government officials, international advisers, and public interest group leaders. I also advised a Ph.D. dissertation by Ilian Cashu that undertook similar work in a different set of countries.

My close observation of the transnational campaign for pension privatization in the late 1990s and early 2000s seemed to contradict most of what I had been taught about the politics of welfare state development in graduate school. In political science, most accounts of welfare state development emphasize domestic political factors, such as labor mobilization and state political economic strategies. One school of thought suggests that domestic labor force mobilization encourages countries to develop welfare programs (Huber and Stephens 2001). Another emphasizes that welfare states represent national reactions to trends in the global economy. My own dissertation adviser at Yale, David R. Cameron, showed conclusively that smaller, trade-exposed states in Europe build larger welfare states to compensate workers for their greater vulnerability to external economic trends (Cameron 1978). This remains one of the classic statements in the literature and has been verified on a global scale by Rodrik (1998) and others. Pierson's (1994) work on path dependency suggests that national politics also determine the extent and nature of efforts to cut back or "retrench" welfare state institutions. This dovetails nicely with a prominent set of theories on "varieties of capitalism" that emphasizes that states choose a variety of different capitalist institutions and that these choices tend to constrain future behavior. Garrett (1998) and Swank (2002) further show that welfare state programs represent a state's reaction to international economic competition and that national, not international, politics drive their development and change.

Yet my observations of the campaign for pension privatization seemed to clash with this national perspective. I...