Feed the Beast: Finance Capitalism and the Spread of Pension Privatisation in Europe

39 Pages Posted: 19 Jan 2015

See all articles by Marek Naczyk

Marek Naczyk

Sciences Po Paris - Centre d’études européennes; Sciences Po Paris - LIEPP

Bruno Palier

Fondation Nationale des Sciences Politiques (FNSP)

Date Written: July 10, 2014

Abstract

Why, since the mid-1980s, have so many European governments decided fiscally to support the development of private retirement savings accounts? Whereas analysts of pension reform in affluent democracies have traditionally considered the development of private pensions as a secondary outcome of welfare state retrenchment, we argue that governments have actively promoted their expansion as a result of financial industry lobbying. In the context of heightened competition between European financial centres that has accompanied the liberalisation and internationalisation of capital markets since the mid-1970s, stock exchanges, together with other financial services organisations, have started arguing that, by creating a vast and steadily growing pool of financial capital, private pension funds could play an essential role in strengthening the competitive position of their home country as a financial centre. Politicians have in turn been attracted to pension privatisation because a strong domestic financial sector could provide their country with greater investment capacities and help create new jobs at a time of deindustrialisation. As both market and political actors have observed policy developments in peer countries, the politics of pension privatisation has been marked by strong international interdependence and patterns of international diffusion. We support our argument through comparative process-tracing of pension reform in three very different cases, namely Great Britain, France and Germany.

Keywords: pension privatization, business, financial services industry, insurance, comparative political economy, international political economy, varieties of capitalism, welfare state, politics, pension reform, pension privatisation, pension funds, stock exchange, capital markets, finance, globalization, France, Germany, United Kingdom, Great Britain

JEL Classification: D60, D78, D92, E21, E22, E44, E62, F21, G10, G15, G22, G23, G28, H20, H55, J10, J26, J32, N20, P16

Suggested Citation

Naczyk, Marek and Palier, Bruno, Feed the Beast: Finance Capitalism and the Spread of Pension Privatisation in Europe (July 10, 2014). Available at SSRN: https://ssrn.com/abstract=2551521 or http://dx.doi.org/10.2139/ssrn.2551521

Marek Naczyk (Contact Author)

Sciences Po Paris - Centre d’études européennes ( email )

27 Rue St. Guilllaume
Paris, 75007
France

HOME PAGE: http://www.cee.sciences-po.fr/en/le-centre/associate-researchers/1066-marek-naczyk.html

Sciences Po Paris - LIEPP ( email )

27 rue Saint-Guillaume
Paris Cedex 07, 75337
France

HOME PAGE: http://mareknaczyk.wordpress.com

Bruno Palier

Fondation Nationale des Sciences Politiques (FNSP)

27, rue Saint-Guillaume
Paris, 75007
France

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