Mongrels or thoroughbreds: A cross-national look at social security systems

Abstract. This paper reviews the methodological issues raised by different commentators' attempts to categorise countries' social security systems into 'regime types' or 'models'. It is argued that there are two major problems with these categorisations: (1) the difficulty of finding empirical counterparts to the theoretical concepts used; (2) the complexity of actual social security systems, arising in particular from the diversity of benefits within each system. Despite these problems, we argue that it is possible to maintain a theoretically-informed approach to the comparative analysis of social security, by adopting a more flexible methodology. The approach presented in this paper identifies some of the main principles on which social security systems are based, specifies their empirical counterparts, and allows each national system to be analysed in terms of its particular conjunction or combination of principles.     

Social security trends and developments in industrialized countries

In the industrialized countries, there has been much discussion on the short- and long-range financing problems of their social security programs. Prolonged unfavorable economic conditions triggered by the oil price shocks of the 1970's and negative demographic trends have caused many of these countries to adapt their social security programs in an effort to maintain financial stability. System modifications that have occurred abroad over the past 10 years have centered primarily on changes in financing, adjustments for inflation, measures to slow down increases in health care expenditures, and steps to promote the hiring of the unemployed. This article examines some of the significant changes that have taken place in the social security programs of the Western European countries, Australia, Canada, Israel, and Japan since 1971.     

Social Security as Poverty's Guardian

Although social security programs were originally introduced as measures to reduce the poverty of needy groups, factors such as coverage, vestedness, administrative regulations and the so-called "wage stop" effectively prevent millions of people throughout the world from living decently when their only source of income is from social security. In the overwhelming majority of social security programs worldwide, including old-age pensions, illness and maternity programs, workers compensation, and family or children's allowances, coverage is open only to workers and usually excludes housewives, transient workers, agricultural laborers, new immigrants and part-time workers. Similarly, vestedness requirements effectively prevent many people from receiving benefits. Administrative regulations, including waiting times and proof of status, add to the difficulties many people have in getting social security benefits. Most importantly, the stipulation in almost every program that no one should be able to get from welfare programs that which he or she could get from wages or salaries keeps the level of payments far below the poverty line. This paper will document and demonstrate the influence of social security programs throughout the world in contributing to the maintenance of poverty and will propose some radical solutions for overcoming the problem.     

The relationships between public and private pension schemes: an introductory overview

Only recently have social insurance and private pensions, collectively, come to be thought of in terms of a total social security benefit package. The economic problems brought on by the 1974 oil crisis initially triggered consideration of a common, integrated role for the two systems. The second oil crisis reinforced the relative expansion in private pension programs, as a supplement to social security. Before these events, private and public pension programs interacted in only a limited number of ways, confined to relatively few countries. These interactions were largely confined to collective bargaining, whereby private pensions were gradually extended to nearly all employees in France and Sweden; mandating, or legally requiring private supplementation of social security, debated in several countries in the early 1970's, but postponed by the 1974 oil crisis; and contracting out, or covering a part of the social security benefit under a private plan, as in the United Kingdom. Overall, the tradition of private pensions was not very strong or broadbased. The current debate centers on which public/private pension mix is desirable from the point of view of an old-age income-maintenance program. A new element is the rising support for a "third pillar"--individual tax-encouraged savings--not only as a supplement, but as an alternative to social insurance.     

Relationship between the retirement, disability, and unemployment insurance programs: the U.S. experience

This article was prepared initially for an international conference of social security program administrators and researchers. They examined the reasons for, and implications of, a recent trend in several European countries toward making it easier to qualify for retirement or disability benefits as a way of alleviating long-term unemployment. The article notes that the United States has not followed this trend. Instead, this country has continued to use temporary extensions of unemployment insurance benefits as a way to help the long-term unemployed during recessionary periods. Since the mid-1970's, the emphasis in retirement and disability insurance programs has been to strengthen the financial integrity of these programs rather than to expand eligibility. Described here are the progression of extended benefit provisions of unemployment insurance through the most recent recession, the historical development of early retirement features in the social security program, and the more recent attention that has been paid to the financing issues that have played a central role in legislation during the late 1970's and early 1980's. Unemployment experience and trends toward early retirement are examined, along with the role of public and private employee pension plans that supplement social security retirement benefits. Preliminary data from the Social Security Administration's New Beneficiary Survey show the prevalence of such pension coverage for recent retirees and the extent to which these pension benefits were claimed before normal retirement age.     

PRIVATIZATION OF SOCIAL SECURITY IN SOUTHEAST ASIA

This article examines the main social security programs, narrowly defined to include income maintenance for the aged and health care, in Indonesia, Malaysia, Singapore and Thailand, and reveals the large degree to which the statutory programs depend on private provision, particularly, private financing. It further shows that efforts are underway to reduce, or at least to arrest the expansion of role of the state by a corresponding expansion in the role of private provision and financing. The expansion of social security for the aged in Thailand is an exception in this regard. I conclude that both inefficiency and inequity have been promoted.     

Global Security and Economic Well-being: a Strategic Perspective

The end of the Cold War has wrought havoc among Western students of strategy as well as among and to the political institutions of the post-war period. Many erstwhile 'strategists' have decided that it is more correct for the 1990s to become specialists in security, even global security. This paper examines critically, in strategic perspective, the purported connections between economic well-being and global security. The proposition that a strategic, more broadly a 'realist', perspective either neglects or discourages ethical considerations is also discussed. There is less than meets the eye to claims for a rising pre-eminence for economic issues vis a vis a global security, while the very concept of a global security is more attractive than it is useful.     

中德社会保障争议处理制度比较研究

中德两国在历史发展过程中逐步形成了各自独特的社会争议处理制度和模式。德国社会法院作为专门审理社会保障争议的特殊行政法院，体现了法律保护的缜密性和司法的高度专业性，适应了社会保障争议多，内容纷繁复杂，技术性、专业性强的现实需要。中国社会保障争议处理法律制度则处于形成发展阶段，因争议种类、主体不同而设置了不同的解决争议的机构，采用了不同的法律制度、程序和处理原则。本文以两国现行社会争议处理法律规定作为比较标准，按照社会争议处理的程序，分别从社会争议的范围界定、行政处理程序和制度、法院处理程序和制度三方面进行了比较研究，为中国社会保障争议处理制度提供借鉴和启示。     

Worldwide trends and developments in social security, 1983-85

This article highlights the major developments and trends in social insurance programs that are presented in detail in the 1985 edition of Social Security Programs Throughout the World. The data in that reference book reflect the fact that as countries have adapted to the slow economic growth in recent years, increased emphasis has been placed on the cost effective use of social security funds. Some industrialized countries have restructured benefit provisions and reallocated resources among programs and beneficiaries to target benefits for specific groups. In the developing nations, the introduction of additional programs and expanded benefits continued on a limited scale amidst widespread concern about maintaining the real value of benefits after years of high inflation.     

The Effects of Capital Mobility, Trade Openness, and Democracy on Social Spending in Latin America, 1980–1999

Empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals. This study seeks to improve upon previous work by (1) employing a more sophisticated and comprehensive measure of financial openness; (2) using a more accurate measure of trade openness based on purchasing power parities; and (3) relying on social spending data that are more complete than those used by previous studies on Latin America. Our estimates suggest that several empirical patterns reported in previous work deserve a second look. We find that trade openness has a positive association with education and social security expenditures, that financial openness does not constrain government outlays for social programs, and that democracy has a strong positive association with social spending, particularly on items that bolster human capital formation.     

Bremst der Föderalismus den Leviathan? Bundesstaat und Sozialstaat im internationalen Vergleich, 1880–2005

This paper examines the impact of federal state structures on welfare state development in the six classic OECD federations since the 1880s. Starting from the widely acknowledged assumption in comparative public policy research that depicts federalism as an impediment to the expansion of the Leviathan, we demonstrate that federalism has facilitated as well as impeded social policy development. Development is contingent on several time-dependent factors, including the degree of democratization, the type of federalism, the stage of welfare state development and early distribution of social policy responsibility. Federalism also has had an impact on patterns of benefit provision, and we identify a variety of bypass strategies by which the six federations were able to overcome their built-in constitutional rigidities. These institutional changes had a lasting structural impact on the emerging patterns of social security. Overall, federalism has contributed to a status quo bias in social policy, not only because it delayed the early consolidation of national social programs but also, more recently, because it has protected the welfare state against retrenchment.     

Mandating private pensions: experience in four European countries.

This study examines the experience of four countries--the Netherlands, Sweden, Switzerland, and the United Kingdom--in which the mandating of private pensions exists or has been considered. Proposals to mandate private pensions in the United States have been introduced in Congress several times. The analysis of foreign thinking presented here provides a background on the reasoning behind such a policy and on the integration of private and public systems and the problems involved. A prime reason for mandating private pensions--instead of seeking higher social security benefits or additional social security layers--has been the pressure to avoid higher payroll taxes. Some countries already had such high contribution rates that they sought other means to improve benefits. Adding a layer of private pensions, it was thought, does not involve Government mechanisms and keeps the money in the private sector. Yet mandating by law creates many problems, and no country has fully implemented such legislation.     

Well-Being in the Welfare State: Level Not Higher, Distribution Not More Equitable

The terms well-being and welfare are Often bracketed together, especially well-being and state welfare. The level of well-being is believed to be higher in welfare states, and its distribution more equitable. This theory is tested here in a comparative study of 41 nations from 1980 to 1990. The size of state welfare is measured by social security expenditures. The well-being of citizens is measured in terms of the degree to which they lead healthy and happy lives. Contrary to expectation, there appears to be no link between the size of the welfare state and the level of well-being within it. In countries with generous social security schemes, people are not healthier or happier than in equally affluent countries where the state is less open-handed. Increases or reductions in social security expenditure are not related to a rise or fall in the level of health and happiness either. There also appears to be no connection between the size of state welfare and equality in well-being among citizens of the state. In countries where social security expenditure is high, the dispersion of health and happiness is not smaller than in equally prosperous countries with less social insurance spending. Again, increases and reductions in social security expenditure are not linked with equality in health and happiness among citizens. This counterintuitive result raises five questions: (1) Is this really true? (2) If so, what could explain this lack of effect? (3) Why is it so difficult to believe this result? (4) How should this information affect social policy? (5) What can we learn from further research?     

Worldwide trends and developments in social security, 1985-87

This article highlights major trends and developments in social security programs featured in the publication Social Security Programs Throughout the World, 1987. Certain developments observable in industrialized countries, especially in Europe--continuing high unemployment levels, particularly among the young; growing numbers of long-term unemployed; and aging populations--tend to create financial instability in social security programs. Thus, as program costs continue to rise, the emphasis on cost-effective use of social security funds becomes more pronounced. In the period under review, this concern is reflected in the widening interest in mandated private pension supplementation of social security, as well as in measures to encourage employment. In developing countries, a strengthening of programs for families and, in some instances, a lowering of the retirement age are noted, in addition to a general expansion in the benefit structure of the work-injury program.     

Social security reform in Central and Eastern Europe: variations on a Latin American theme

After Chile reformed its social security system in 1981, several other Latin American countries and certain Central and Eastern European (CEE) countries implemented the Chilean model, with some variations: either a single- or multitier system, or with a period of transition to take care of those in the labor force at the time of the change. The single-tier version consists of individual accounts in pension fund management companies. Multi-tier systems retain some form of public program and add mandatory individual accounts. Most of the CEE countries did not want to incur the high transition costs associated with the Chilean model. The switch to a market economy had already strained their economies. Also, the countries' desire to adopt the European Union's Euro as their currency--a move that required a specific debt ceiling--limited the amount of additional debt they could incur. This article describes the CEE reforms and makes some comparisons with the Latin American experience. Most of the CEE countries have chosen a mixed system and have restructured the pay-as-you-go (PAYGO) tier, while the Latin American countries have both single- and multi-tier systems. Some CEE countries have set up notional defined contribution (NDC) schemes for the PAYGO tier in which each insured person has a hypothetical account made up of all contributions during his or her working life. Survivors and disability programs in CEE have remained in the public tier, but in most of the Latin American programs the insured must purchase a separate insurance policy. Issues common to both regions include: Administrative costs are high and competition is keen, which has led to consolidation and mergers among the companies and a large market share controlled by a few companies. Benefits are proportionately lower for women than for men. A large, informal sector is not covered by social security. This sector is apparently much larger in Latin America than in the CEE countries. Issues that are unique to some of the CEE countries include: Individual accounts in Hungary and Poland have proved more attractive than originally anticipated. As a result, contributions to the public PAYGO system in Hungary and Poland fell short of expectations. In several countries, laws setting up the programs were enacted without all the details of providing benefits. For example, in some countries laws must now be drawn up for establishment of annuities because they do not yet exist. Setting up a coherent pension policy has been difficult in some countries because of frequent and significant changes in government. This situation has affected the progress of reform in various stages of development. In general, a definitive assessment of individual accounts in these countries will not be possible until a cohort of retirees has spent most of its career under the new system.     

Job security regulations in Western democracies: A fuzzy set analysis

This article uses fuzzy set qualitative comparative analysis (fsQCA) to examine the determinants of job security regulations – here understood as restrictions on hiring and firing – in Western democracies. Unlike previous studies, the analysis reveals three different paths to high levels of job security regulations. The first path covers the Southern European state capitalist countries. In these countries, conflicts between forces pushing for liberal democracy and groups alienated from modernisation have led to high levels of statism and crowded out other societal actors. Job security regulations were enacted relatively early in order to provide social security by means available to the state. Due to fragmented welfare states, job security regulations have remained one of the most important pillars of the social protection regime. The second path covers the Continental European managed capitalist countries and is also characterised by high levels of statism. In these countries, repressive governments employed a stick‐and‐carrot strategy to weaken the labour movement and tie the loyalties of the individual to the state. After the Second World War, these countries developed corporatist intermediation systems and encompassing and generous welfare states. Finally, the third path covers the Nordic managed capitalist countries. This path is characterised by a high degree of non‐market coordination, strong labour movements and few institutional veto points. In the Nordic managed capitalist countries, job security regulations traditionally have been subject to collective agreements. However, in the 1960s, labour movements succeeded in pushing through the public legislation of job security despite opposition from employers' associations. Methodologically, this article demonstrates that cross‐national differences in the level of job security regulations can only be explained if the methods used allow for complex causality. In contrast, methods which focus on ‘net effects’ do not offer satisfactory explanations for the cross‐national differences in the level of job security regulations.     

Social Security and Third World Poverty: The Challenge to Policymakers

Although social security emerged in the industrial countries as a mechanism for alleviating and preventing poverty, it has had a negligible impact on the problem of poverty in the developing countries. Because of the high incidence of poverty in the Third World and the need for effective interventions, conventional social security policies should be critically reexamined. Reviewing previous attempts to formulate social security policies that focus on the poor, this paper challenges policymakers to identify innovative social security programs that address the poverty problem directly.     

WELFARE IDEOLOGY, THE MARKET AND SOCIAL SECURITY: Towards a Typology of Market-Oriented Reform

The global shift towards the market in the provision of social security is typically associated with the values of the New Right, but we take issue with this view. An examination of the main welfare ideologies that have influenced the development of contemporary social security systems suggests that the market and individualism have a role to play in a range of approaches to reform. Whilst some approaches unreservedly endorse the market – in a way which accords with the ideas of the New Right – other approaches adopt a pragmatic orientation based on a recognition of two public policy dilemmas, “market failure” and “state failure.” This attempt to define a middle way typifies many of the recent social security reform initiatives. Drawing upon Esping‐Andersen's recent work on de‐commodification, we construct a typology of normative approaches to the provision of social security which may be used to contextualise market‐oriented social security reform initiatives. This we argue is necessary to avoid the over‐simplified dichotomy between individualism and collectivism which is typical of so much recent work on social security reform.     

America's Misunderstood Welfare State: Myths and Realities

To listen to the critics, one would think that the nation's social welfare programs were an abject failure–ungovernable, unaffordable, and undesirable. But though widely believed by Americans of every political persuasion, the perception of failure is false. As the authors demonstrate, America today has all the institutions of a mature welfare state, while still regarding "welfare statism" with deep suspicion. The authors seek to explain this paradox and to set the record straight about the actual workings and accomplishments of the nation's welfare programs – social security, public assistance, and medical care –and it shows that the gloom and doom that surround so much public discussion in this area stems from simple, attractive–and false–ideas about what these programs are and how they work. Above all, they argue that American social welfare policy has been shaped by certain enduring commitments which most Americans believe in whether they realize it or not.     

How domestic contexts shape international private governance: The case of the European Accord and American Alliance in Bangladesh

The international nature of supply chains has led to the rise of private authority in regulating the environmental and social impacts of production, which companies frequently address through corporate social responsibility (CSR) in the form of private governance (PG). Despite its claim to establish “global” rules, PG usually has national origins, and multiple efforts to address the same issue from different national perspectives frequently coexist. Numerous studies have explored the impact of national business systems on companies' domestic CSR practices, yet little is known about what factors shape CSR practices like PG internationally. Therefore, this study seeks to understand how differing domestic contexts shape approaches to CSR in the form of PG in host countries. I explore this empirically through the comparative case study of competing PG initiatives in the post-Rana Plaza Bangladesh garment industry, uniquely conceived to govern companies' practices rather than certify products. It combines empirical findings with the comparative CSR literature to hypothesize about ideal types of PG organizing in US and European contexts. It extends the analysis to also account for other influential factors, such as stakeholder pressure, thus demonstrating how institutional and agentic factors amalgamate to shape firms' choices. By explicating linkages between international PG and its domestic context, as well as between the comparative CSR and PG literature studies, this study extends our understanding of how and why international PG practices and preferences vary for firms originating from different environments.