From privatization to nationalization: Crisis and path-departure in Argentine pension policy

ARZA, CAMILA

Toronto

Congreso; Latin American Studies Association (LASA) International Congress 2010; 2010

Latin American Studies Association (LASA)

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. In 2008, after 14 years of operation the funded pension system was replaced once again for a public pay-as-you-go model. While some of the most influential literature on policy reform stresses on the path-dependent nature of social security and the political constrains for reform, Argentine politicians have been able to radically change pension policy twice in 14 years. How can we explain this? The paper analyses three factors which can contribute to understand major reforms beyond the constraints predicted by path-dependence: (1) crisis and the windows of opportunity they create, (2) policy failure and negative feedbacks, and (3) changing ideas and policy paradigms.