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Privatizing Pensions

Privatizing Pensions: The Transnational Campaign for Social Security Reform

Mitchell A . Orenstein
Copyright Date: 2008
Pages: 232
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  • Book Info
    Privatizing Pensions
    Book Description:

    To what extent do international organizations, global policy networks, and transnational policy entrepreneurs influence domestic policy makers? Have we entered a new phase of globalization that, unbeknownst to most citizens, shapes policies that used to be the sole domain of domestic politics?Privatizing Pensionsreveals how international institutions--such as the World Bank, USAID, and other transnational policy actors--have played a seminal role in the development, diffusion, and implementation of new pension reforms that are transforming the postwar social contract in more than thirty countries worldwide, including the United States.

    Mitchell Orenstein shows how transnational actors have driven change in a policy area once thought to be beyond reform in many countries, and how they have done so by deploying their unique resources and legitimacy to promote new ideas, recruit disciples worldwide, and provide a broad range of technical assistance to government reformers over the long term. He demonstrates that while domestic decision makers may retain veto power over these reforms--which replace traditional social security with individual pension savings accounts--transnational policy makers play the role of "proposal actors," shaping the information, preferences, and resources of their domestic clients.

    Privatizing Pensionsargues that even the most quintessentially domestic areas of policy have been thoroughly globalized, and that these international influences must be better understood.

    eISBN: 978-1-4008-3766-3
    Subjects: Political Science

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Figures and Tables
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xiv)
  5. Introduction
    (pp. 1-13)

    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 José Piñera, a former Chilean Secretary of Labor and Social Security. Piñera 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...

  6. Chapter One The Rise of Pension Privatization
    (pp. 14-35)

    Pension privatization, involving the creation of state-mandated systems based on individual, private pension savings accounts, is not just a revolution in the postwar social contract. Its adoption in more than thirty countries worldwide provides a leading example of the transnationalization of domestic policy. This chapter charts the rise of pension privatization and shows that standard explanations based on economic conditions and domestic politics cannot fully explain the rapid diffusion of these new pension reforms. Comparing the spread of pension privatization to the spread of first pension systems in countries worldwide shows that the diffusion of pension privatization has been faster,...

  7. Chapter Two Evaluating the Impact of Transnational Actors
    (pp. 36-54)

    Transnational Actors have been directly involved in the enactment of pension privatization in countries around the world, but have they been important or only tangentially involved? How does one evaluate their impact and limits? This chapter evaluates the existing literature on pension privatization and finds substantial conceptual and methodological problems with the way transnational actor influence is assessed. It presents the results of a comprehensive study of World Bank project documents that suggests that transnational actors may have a greater impact than previously assumed. This study goes beyond previously published works by showing that the World Bank has not advocated...

  8. Chapter Three A Model of Transnational Actor Influence
    (pp. 55-70)

    The Previous Chapter showed that many studies underestimate the influence of transnational actors by adopting restrictive definitions of who they are, stylized understandings of what they want, and a narrow focus on a single organization or type of organization. This chapter provides an enhanced framework for analyzing the activities and influence of transnational actors on domestic policy. This framework builds on the veto players model of Tsebelis (2002) and the bureaucratic approach to the study of international organizations proposed by Barnett and Finnemore (2004). It suggests that transnational actors can best be understood as proposal actors—defined as individual or...

  9. Chapter Four The Transnational Campaign for Pension Privatization
    (pp. 71-94)

    Since 1994, transnational actors have organized and coordinated a campaign to promote pension privatization in countries around the world. This chapter provides a narrative account of the development of this campaign and the transnational actors involved in it. It illustrates the model of transnational actor influence developed in chapter 3 above. First, it shows how a transnational epistemic community supporting pension privatization was established and took up positions of power within leading international organizations, including the World Bank. Second, it shows that these organizations have enjoyed sufficient resources to exert a pervasive influence on domestic pensions policy in multiple countries....

  10. Chapter Five Domestic Enactment of Pension Privatization
    (pp. 95-140)

    Transnational policy actors develop reform ideas in a global policy space, but often they must be enacted in a specific national context. This raises questions about the relations between transnational policy actors and domestic reformers. Who takes the lead in the transfer of pension privatization ideas? How do transnational policy actors exert influence over domestic actors? What is the relative importance and nature of transnational versus local contributions to reform? To what extent do transnational actors determine specific features of reform in particular countries?

    While previous chapters focused on the transnational campaign for pension privatization, this one shifts to the...

  11. Chapter Six Transnational Influence and Its Limits
    (pp. 141-165)

    Chapter five explored the roles of transnational policy actors in the domestic policy process in three postcommunist countries. These case studies showed that the World Bank and USAID played a major role in each country in all three domestic phases of reform: commitment building, coalition building, and implementation. Perhaps the greatest influence of transnational proposal actors came during policy development and commitment building within governments. These case studies showed that transnational policy actors used at least five distinct mechanisms of influence: disseminating reform ideas through conferences and seminars, funding reform teams during the planning of reforms, providing technical assistance to...

  12. Chapter Seven Analyzing Transnational Public Policy
    (pp. 166-178)

    The widespread impact of transnational policy actors raises questions about power in the international system, the extent of U.S. hegemony, forces of global governance, and the nature of democratic sovereignty. Some have argued that U.S. power is behind the influence of the World Bank and other international organizations (Wade 2002). While the United States obviously has had a substantial influence on the World Bank and other Washington consensus organizations, it would be difficult to argue that pension privatization represents an outgrowth of U.S. state power. While President George W. Bush advocated the adoption of pension privatization in the United States...

  13. Appendix: Understanding Pension Privatization
    (pp. 179-194)
  14. References
    (pp. 195-212)
  15. Index
    (pp. 213-216)