Social Protection and Economic Integration: The Politics of Pension Reform in an Era of Capital Mobility

In the past two decades of the 20th century, governments around the world began to apportion greater responsibility for old-age income provision to individuals and market forces through the privatization of pension systems. This article examines the political and economic foundations of the turn to private pension systems through a quantitative analysis of 57 countries around the world. I offer a causal model to explain the likelihood and degree of pension privatization based on the unique incentives and constraints created by domestic political and economic structures in each country. I show that the likelihood and degree of structural pension reform are shaped by the cost of the existing pension system, political party structures, domestic investment and debt levels, and geopolitical networks.