Have post-communist governments advocating pension retrenchment initiatives been able to translate them into actual policy reforms? What factors account for their retrenchment success and what explains their failure? How far can governments bent on retrenchment go before losing all political support?
In order to answer these questions, this study will draw on the comparative theory of welfare state retrenchment. Since this theory was originally developed to explain the politics of restructuring of the Western welfare states, it will be readjusted to match the realities of the transitional regimes. The study will test the major propositions derived from the comparative theory of retrenchment and advance new explanations in cases where they will not hold. Its main analytical task is to examine the impact different political institutions have on governments’ ability to cut welfare spending. Political institutions is the main independent variable singled out for this study under the assumption that they shape differently the pension retrenchment process and its outcomes. Hence, the justification for choosing a parliamentary system (Latvia), a semi-presidential system (Romania), and a super-presidential system (Russia).
The study confines
its focus to the largest welfare state program – the public pension system.
What makes this program an excellent case for this research is its hypothesized
capacity to withstand radical cuts often attributed to its main institutional
characteristics. Benefits are earned through lifetime mandatory contributions,
coverage is nearly universal, and financing is based on a PAYG (pay-as-you-go)
intergenerational contract, where current workers pay taxes to support
the pensions of current retirees. Such systems may face incremental cutbacks,
but they are notoriously resistant to radical change.
Retrenchment refers to policy
changes that reduce the generosity, coverage, or quality of pension benefits.
Specifically, this research aims to identify and explain strategies that
policymakers use to maximize the political feasibility and minimize electoral
consequences of these unpopular policy measures; secondly, to spell out
the conditions that facilitate the adoption of negotiated versus unilaterally
imposed reforms; thirdly, to explain the ways in which political institutions
allow civil society actors to influence the decision-making process; and,
fourthly, to specify the mechanisms through which international organizations
form alliances with domestic partners to jointly influence the pension
retrenchment process and its outcomes.