Pension Fund Capitalism: A Causal Analysis

Oxford Working Paper No. WPG 98-1

41 Pages Posted: 6 Apr 1998

See all articles by Gordon L. Clark

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Date Written: January 1998

Abstract

Since 1980, U.K. individual pension and retirement assets have increased about 10 fold to about 1.1 trillion Pounds. Over the same time, U.S. household retirement assets have increased about 7 fold to more than $5 trillion. High rates of asset growth have also been observed for Australia and Canada. Notwithstanding their current high standards of living, much of continental Europe has not shared in these extraordinary rates of growth of pension assets. In fact, many analysts believe that their long-term prosperity is threatened (relatively speaking) by inefficient, institutionally cumbersome finance sectors. While saving now for retirement has significant advantages for beneficiaries, less important is the fact that the growth of pension assets in the Anglo-American economies have profoundly changed the financial structure of these countries. Here I explain how and why pension assets have grown so large in the Anglo-American countries, beginning with an historical account to identify the reasons why German and continental European countries excluding The Netherlands and Switzerland have not shared the same rates of growth of pension assets. In doing so, the paper develops an explanatory model which discriminates between various causes of Anglo-American pension fund capitalism: structural determinants (institutional framework), second-order determinants (post-war conditions), and third-order determinants (contributions). The identified causal logic relies upon Ehring's conception of causality, integrating structure with historical and geographical contingency. Implications are also drawn regarding the significance of Anglo-American pension funds for global capitalism.

JEL Classification: G23, G28

Suggested Citation

Clark, Gordon L., Pension Fund Capitalism: A Causal Analysis (January 1998). Oxford Working Paper No. WPG 98-1. Available at SSRN: https://ssrn.com/abstract=73366 or http://dx.doi.org/10.2139/ssrn.73366

Gordon L. Clark (Contact Author)

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

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