Accelerating Smaller Cutbacks to Delay Larger Ones? The Politics of Timing and Alarm Bells in OECD Pension Generosity Retrenchment

AGEING POPULATIONS IN POSTINDUSTRIAL DEMOCRACIES, Pieter Vanhuysse, Achim Goerres, eds., Abingdon: Routledge/ECPR European Political Science Series, 2012

40 Pages Posted: 7 Sep 2010 Last revised: 28 Feb 2012

See all articles by Markus S. Tepe

Markus S. Tepe

University of Oldenburg

Pieter Vanhuysse

University of Southern Denmark

Date Written: September 7, 2010

Abstract

This paper investigates the politics of delays in pension generosity cutbacks in 18 OECD democracies between 1981 and 1999 by using event history analysis. In the context of fiscal austerity, policymakers are assumed to have a strong incentive to manipulate the timing of cutbacks strategically. Investigating both medium and large cutbacks in ageing welfare states, we test whether, in addition to conventional demographic and economic variables, political-institutional variables capturing partisanship (political ideology), electioneering (political cycle), and institutional constraints (political rigidity) contribute to explain the timing of cutbacks. While the latter two factors are found not to have any significant effect on the timing of pension generosity cutbacks, more rightleaning governments tend to implement pension generosity cutbacks significantly earlier. Finally, we find almost mirror effects of unemployment and population aging: these socio-demographic variables tend to delay large-size cutbacks, but to accelerate medium-size cutbacks in pension generosity, possibly because they function as alarm bell signals urging policymakers to take still feasible incremental action through ‘muddling-through type’ retrenchment in order to delay more radical and politically highly risky retrenchment.

Keywords: blame avoidance, crisis politics, event history analysis, electioneering, partisanship, retrenchment delays, veto players

Suggested Citation

Tepe, Markus S. and Vanhuysse, Pieter, Accelerating Smaller Cutbacks to Delay Larger Ones? The Politics of Timing and Alarm Bells in OECD Pension Generosity Retrenchment (September 7, 2010). AGEING POPULATIONS IN POSTINDUSTRIAL DEMOCRACIES, Pieter Vanhuysse, Achim Goerres, eds., Abingdon: Routledge/ECPR European Political Science Series, 2012. Available at SSRN: https://ssrn.com/abstract=1673366

Markus S. Tepe

University of Oldenburg ( email )

Ammerländer Heerstraße 114-118
Oldenburg, DE D-26111
Germany

HOME PAGE: http://www.tepems.de

Pieter Vanhuysse (Contact Author)

University of Southern Denmark ( email )

Campusvej 55
DK 5230 Odense
Denmark

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