The Open Method of Co-ordination on Pensions - An Economic Analysis of its Effects on Pension Reforms

Abstract

This paper analyses the potential effects of the open method of co-ordination on pension reforms in the European Union from an economic point of view. The main results are: (1) For the first time, the Commission formally participates in the input of pension policy-formation of the member states, but without affecting their ultimate decision-making powers. (2) However, the OMC might foster yardstick competition and thus mutual learning from the reform experiences of other member states. (3) In contrast to that, no clear effects on the rent-seeking behaviour of special-interest groups and thus on their influence in shaping pension reforms can be derived.