From the state to the market and back: "path independence" in Argentine pension policy?

ARZA, CAMILA

Santiago de Chile

Congreso; International Political Science Association (IPSA) Annual Congress; 2009

International Political Science Association

In 1994 Argentina was one of the first countries in Latin America to adopt the three pillar model of pension administration. It abandoned the pay as you go system established many decades before and shifted the management role to the market. Private pension funds were set up to administer the contributions of workers and pension rights started to depend on market outcomes. After 14 years of operation the funded pension system has now been replaced once again for a public pay-as-you-go model, very similar the one abandoned in the early 1990s. While some of the most influential literature on policy reform (e.g. Paul Pierson) stresses on the path dependent nature of social security and the policy constrains reformers continuously face to adjust pension systems in the face of demographic change, Argentine politicians have been able to radically change pension policy twice in 15 years. What can explain this difference? The paper analyses three factors which can contribute to understand structural policy reform beyond the constraints predicted by path-dependence explanations: (1) crisis and the windows of opportunity they create, (2) policy failure and negative feedbacks, and (3) ideas and discourse.