In: Guardiancich , I 2016 , ' Slovenia : The End of a Success Story? When a Partial Reform Equilibrium Turns Bad ' , Europe-Asia Studies , vol. 68 , no. 2 , pp. 205-231 . https://doi.org/10.1080/09668136.2015.1126805
During the Great Recession, Slovenia recorded one of the worst economic performances within the EU. Such a decline is surprising as the country was the most stable among the post-socialist states. The article individuates the root cause for the downfall in protracted reform gradualism, which resulted in an inefficient privatisation process. This locked the country into a 'partial reform equilibrium' where economic elites extracted rents. Following accession to the EU, the unsustainable lending practices of state-owned banks to corporate organisations and the gridlock in policymaking pushed the country into an economic and political 'bad equilibrium'. Even though the Slovenian export sector proved to be surprisingly resilient, a massive debt overhang and a huge reform backlog are still weighing down on a healthy recovery.
In its effort to guarantee the free movement of workers, the European Union devised an advanced system of coordination of social security rights. Since 1958, statutory pensions are being aggregated for workers moving across the Member States. However, until mid‐2014, the portability of supplementary pension rights was not assured, there by undermining the freedom to labor mobility. This impaired the efficient allocation of labor, prevented sound family planning, infringed the fundamental right to social protection and during the Great Recession, hindered the employability of workers across a slowly recovering Europe. After nine years of negotiations, the EU has finally passed a Portability Directive, which is, however, a watered down version of the 2005 original proposal. Given such state of affairs, this study has three aims. First, it explains why portability of supplementary pensions, as opposed to the coordination of statutory ones, has been neglected and contested for a long time. Second, it illustrates the shortcomings of a patchy coordination‐without‐portability regime. Third, it enumerates the characteristics of the Portability Directive passed by the European Parliament in April 2014, and the strategic steps undertaken to secure its final adoption.
The political-economy literature has so far almost unanimously regarded Slovenia as the social-democratic exception in Central and Eastern Europe, due to a combination of highly consensual democratic institutions, low party polarization, strong social partners, and developed social dialogue. However, the situation, since the fall of the Liberal Democracy of Slovenia (LDS), which governed in 1992-2004, seems to be swiftly changing. Polarization has increased, union legitimacy declined, and social dialogue-especially in the aftermath of the 2007-2009 financial crisis-has all but collapsed. The 2010 pension reform is an archetypical example of how Slovenia now much more resembles its quarrelsome Eastern neighbours than the idealized exception that political scientists usually point at. [Reprinted by permission of Sage Publications Inc., copyright the American Council of Learned Societies.]
The political-economy literature has so far almost unanimously regarded Slovenia as the social-democratic exception in Central and Eastern Europe, due to a combination of highly consensual democratic institutions, low party polarization, strong social partners, and developed social dialogue. However, the situation, since the fall of the Liberal Democracy of Slovenia (LDS), which governed in 1992–2004, seems to be swiftly changing. Polarization has increased, union legitimacy declined, and social dialogue—especially in the aftermath of the 2007–2009 financial crisis—has all but collapsed. The 2010 pension reform is an archetypical example of how Slovenia now much more resembles its quarrelsome Eastern neighbours than the idealized exception that political scientists usually point at.
Defense Date: 28/10/2009 ; Examining Board: Nicholas Barr (LSE), Martin Kohli (EUI), Martin Rhodes (University of Denver, formerly EUI) (Supervisor), Tine Stanovnik (University of Ljubljana) ; The study analyses the legislation and implementation of pension reforms in four Central, Eastern and Southeastern European countries: Croatia, Hungary, Poland and Slovenia. By comparing the political economy of their policymaking processes, it pinpoints regularities between institutional settings, actor constellations, decision-making strategies and reform outcomes. The dissertation addresses three research questions: Why was reform possible and how was it carried through? What are its distributive consequences? Does it guarantee long-term political support? The main argument is that viable pension reforms should not be seen as an event, but rather as a continuing process that must be fiscally, socially and politically sustainable. The primary goals of a pension scheme are poverty reduction, consumption smoothing and insurance. These can be achieved only if the scheme enjoys continuing political support at all levels. Elaborating on this premise, the research makes four broad claims; two related to legislation and two to the implementation of reforms. First, policymakers in post-socialist countries quickly exhausted the possibility of enacting simple corrective measures and were hence forced to negotiate pension reforms with the pro-welfare coalition. Complex exchanges between policy and politics became central to these negotiated bargains. Second, systemic reforms introducing policy innovations, such as funding, were politically superior to parametric changes. Systemic innovations are a source of popular support and free room for manoeuvre. The new funded elements are traded for cuts in public pension schemes. Third, trade-offs between fiscal and social sustainability emerged during legislation, jeopardizing successful implementation. Excessive emphasis on financial viability conflicts with sound social policy. Conversely, failure to eliminate extreme imbalances between contributions and benefits, and unjustified special privileges disrupt the fiscal budget. Finally, how legislation is conducted is important for a reform's political acceptability. Negotiated bargains are qualitatively different from other modes of policymaking. Contrary to a received wisdom in the literature, the thesis argues that inclusive decision-making, as opposed to limited bargaining, increases both the effectiveness of reforms and their political sustainability over time. The involvement of a greater number of stakeholders allows for smoother implementation: costly deviations from efficient solutions are avoided, and incentives to stick to the reform's initial rationale are put in place. With respect to existing work, this study makes two innovations. First, it extends analysis to ten years of implementation, following the reform wave of the late 1990s. Second, it employs theoretical instruments to study Eastern pension reforms that are entirely consistent with those applied to the West. The dissertation links the legislative and the implementation phases together by adapting the Natali-Rhodes' theoretical framework, developed for pension reforms in Continental Europe. The 'spillover' is justified on multiple grounds. First, sufficient analogies exist between the institutional structure and the mounting problems of Bismarckian retirement arrangements and post-socialist pension schemes. Second, this approach accounts for the popularity of systemic pension reforms in the region. By focussing on the 'creative opportunism' of policymakers, it shows how they simultaneously introduced policy improvements and imposed benefit cuts. Finally, the framework is easily extended to the implementation of reforms, thereby linking individual decision-makers' preferences to policy outcomes and their consequent sustainability in time.
After 1989, Hungary inherited a pension system characterised by an unfair and impenetrable mix of social insurance and social assistance. Widespread public dissatisfaction and the near drift into a financial crisis in the mid 1990s cleared the path for the first paradigmatic multipillar reform in Central and Eastern Europe (CEE), thereby attracting major international attention. Implementation, however, did not live up to the very high expectations. Ten years down the road, the new Hungarian pension system stands indeed as a model, but of partial failures and unintended consequences. Applying a historical institutionalist framework, it will be shown that Hungarian pensions underwent both agency-based and structural institutional degeneration. These two phenomena, which recent events have shown to be common for newly legislated multipillar pension schemes, capture those situations where structural transformation takes place, but where, in practice, the old institutional structures 'contaminate' the new institutional arrangements, thereby enabling the blending of old and new logics of action. In the worst-case scenario, degeneration may lead to the demise of the new institutional arrangement. In the case of Hungary, its retirement system is a paradigmatic case of poor and hasty institutional design. The expectations of involved actors failed to adapt, as neither policymakers nor private pension providers play by the rules of the game. The former indulge in extreme political budget cycles and the latter cannot self-regulate, thereby distorting competition. Furthermore, institutional complementarities are not gainfully exploited, since unfortunate policy solutions rendered the mandatory funded pillar costly, inefficient and disadvantageous with respect to the public scheme. As a consequence, Hungarian pensions are once again in dire need of a structural overhaul. However, at the time of writing, October 2007, a coherent solution is still nowhere in sight and the many weaknesses of PM Ferenc Gyurcsány's government do not bode well. Policymakers shall learn a lot from the Hungarian experience, since it clearly shows that correct implementation may be every bit as problematic as a successful legislative phase.