Pension system reforms in Argentina : why the u-turn?

Abstract

The 2008 Argentine pension reform represented a new change of paradigm in the country’s pension policy. It encompassed the elimination of the fully funded, defined contribution (DC), private tier of the so-called Integrated Retirement and Pensions System (SIJP) – a two-tiered arrangement implemented in 1994 and inspired by the World Bank’s recommendations contained in the work Averting the Old Age Crisis (World Bank 1994). And the shift back to a publicly managed, single-tiered pension system provided in a pay-as-you-go defined benefit (PAYG-DB) basis: the Argentine Integrated Retirement System (SIPA). In order to finally explain these events, in this thesis I present a detailed account of the events that took place in 2008, divided into six chapters. The first chapter introduces the topic, its background and the research question: Why did Argentina change its pension system back to a one-tiered, pay as you go DB system in 2008? The second explains the appropriateness of the research strategy and the design chosen for this study. In the third chapter, the reader is introduced to the events under analysis and the possible explanations or “suspects” to be explored upon. The fourth chapter provides the framework and settings to understand Argentina’s policy making process. Chapter five brings in with detail the sequence of decisions that resulted in the shift back to a pay-as-you-go DB public pension design in Argentina, connecting them with that group of “suspects” (11 hypotheses) that may explain why it happened. Finally, chapter six rounds up and analyses the findings and closes with the final conclusions and recommendation for further investigation. To briefly summarize some of the findings that made possible this shift back to pay-as-you-go: (a) the effect that changes in public representations of social problems have over the sustainability of their associated social arrangements. (b) The transformations in the private-public mix that have been happening in Argentine society since 2003, and the development of a different understanding of role of the State. (c) The multidimensional feature of social policy – and in particular pension policy – and the way the various dimensions are prioritized and discussed upon during the policy formulation process, leading to a certain “consensual” understanding of what the problem is and how it should be solved. (d) The impact that certain aspects of political cultures – such as the presence of machine politics or ideology – may have over policy and the process of policy change, influencing arguments and final outcomes. (e) The shaping role of institutions and electoral results in the whole policy making process. (f) The new map of international relationships, in particular with the IMF and the World Bank. (g) And how local and international contexts create certain settings that can affect the views of all actors involved.