The Survival and Return of Institutions: Examples from Pension Reforms in Central, Eastern and South-eastern Europe

Abstract

Opening a new phase in historical institutionalism, Wolfgang Streeck and Kathleen Thelen show how a rigid dichotomy between incremental adaptation and radical transformation fails to capture important transformative processes common to advanced political economies. While their research focuses on gradual but radical transformation, the two authors leave open the interpretation of what constitutes abrupt, but only limited change. This article integrates their framework, defines what they call survival and return, and, within this genus, indicates two analytically distinct species: replication, where the old logic survives due to the redundancy of the new institutional arrangement; and reaction, where structural reforms generate demand for the old incentive structures, which are ultimately reintroduced. To elucidate the concepts, recent Croatian, Hungarian and Polish pension reforms are compared and their institutional instability analysed.

Acknowledgements

Earlier versions of this article have been read and commented by a number of scholars. In particular, I would like to thank Manuele Citi, Maurizio Ferrera, Martin Kohli and Kathleen Thelen. My utmost debt of gratitude goes to Maarten Keune, who helped me to streamline my arguments. Finally, I would like to thank the two anonymous reviewers of West European Politics.

Notes

1. A clarification is due. The paper does not deal with critical junctures in organisational behaviour, such as Baumgartner and Jones' (1993) punctuated equilibrium theory of agenda-setting.

2. Brooks and Weaver (2006: 374–5) propose this argument with respect to pension individualisation. They contend that political systems requiring supermajorities are more immune to policy reversals. Hence, broad multi-party agreements backed by public support increase the political sustainability of reforms.

3. Due to the free movement of capital, most limitations will have to go when the country joins the EU.

4. Of course, the 2007–09 financial crisis and its devastating impact on private pension funds elicited everywhere (in Poland as well) a heated debate on the adequacy of these schemes for future retirement benefits. The crisis has to be seen, however, as an exogenous shock of yet unseen proportions, totally independent of previous political dynamics.