Table Of ContentTransformation of Social Security:
Pensions in Central-Eastern Europe
Contributions to Economics
Christoph M. Schneider Ulrich Woitek
Research and Development Business Cycles
Management: 1997. ISBN 3-7908-0997-7
From the Soviet Union to Russia
1994. ISBN 3-7908-0757-5 Michael Carlberg
International Economic Growth
Bernhard BohmlLionello F. Punzo (Eds.)
1997. ISBN 3-7908-0995-0
Economic Performance
1994. ISBN 3-7908-0811-3
Massimo Filippini
Lars 010f PerssonlUlf Wiberg Elements of the Swiss Market for
Microregional Fragmentation Electricity
1995. ISBN 3-7908-0855-5 1997. ISBN 3-7908-0996-9
Ernesto FelliIFurio C. Rosati! Guiseppe Gaburro (Ed.)
Giovanni Tria (Eds.) Ethics and Economics
The Service Sector: 1997. ISBN 3-7908-0986-1
Productivity and Growth
1995. ISBN 3-7908-0875-X Frank HosterlHeinz Welschl
Christoph Btihringer
Giuseppe Munda COz Abatement and Economic
Multicriteria Evaluation Structural Change in the European
in Fuzzy Environment Internal Market
1995. ISBN 3-7908-0892-X 1997. ISBN 3-7908-1020-7
Giovanni Galizzil
Christian M. Hafner
Luciano Venturini (Eds.)
Nonlinear Time Series Analysis
Economics of Innovation:
with Applications to Foreign Exchange
The Case of Food Industry
Rate Volatility
1996. ISBN 3-7908-0911-X
1997. ISBN 3-7908-1041-X
David T. Johnson
Poverty, Inequality and Social Sardar M.N. Islam
Welfare in Australia Mathematical Economics of
1996. ISBN 3-7908-0942-X Multi·Level Optimisation
1998. ISBN 3-7908-1050-9
Rongxing Guo
Border·Regional Economics Sven-Morten Mentzel
1996. ISBN 3-7908-0943-8 Real Exchange Rate Movements
1998. ISBN 3-7908-1081-9
Oliver Fratzscher
The Political Economy of Trade Lei DelsenlEelke de Jong (Eds.)
Integration The German and Dutch Economies
1996. ISBN 3-7908-0945-4 1998. ISBN 3-7908-1064-9
Ulrich Landwehr
Mark Weder
Industrial Mobility and Public Policy
Business Cycle Models
1996. ISBN 3-7908-0949-7
with Indeterminacy
1998. ISBN 3-7908-1078-9
Arnold PicotlEkkehard Schlicht (Eds.)
Firms, Markets, and Contracts
1996. Corr. 2nd printing 1997 Tor R!ildseth (Ed.)
ISBN 3-7908-0947-0 Models for Multispecies Management
1998. ISBN 3-7908-1001-0
Thorsten Wichmann
Agricultural Technical Progress and the Michael Carlberg
Development of a Dual Economy Intertemporal Macroeconomics
1997. ISBN 3-7908-0960-8 1998. ISBN 3-7908-1096-7
continued on page 306
Katharina Miiller . Andreas Ryll
Hans-Jiirgen Wagener (Eds.)
Transformation of
Social Security:
Pensions in Central-
Eastem Europe
With 26 Figures
and 42 Tables
Springer-Verlag Berlin Heidelberg GmbH
Series Editors
Wemer A. Mtiller
Martina Bihn
Editors
Dr. Katharina Mtiller
Dr. Andreas Ryll
Prof. Dr. Hans-Jiirgen Wagener
European University Viadrina
P.O. Box 1786
D-15207 Frankfurt (Oder), Gennany
ISBN 978-3-7908-1210-7
Cataloging-in-Publication Data applied for
Die Deutsche Bibliothek - CIP-Einheitsaufnahme
Transformation of social security: pensions in Central-Eastem Europe; with 42 tables / Katharina
Miiller ... (ed.). - Heidelberg: Physica-Verl., 1999
(Contributions to economics)
ISBN 978-3-7908-1210-7 ISBN 978-3-642-58654-5 (eBook)
DOI 10.1007/978-3-642-58654-5
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Preface
The present volume contains the proceedings of the workshop "Transformation of
Social Security: Pensions in Central-Eastern Europe", held on March 27-28th,
1998 in Berlin. The workshop was realised in the context of the multi-disciplinary
research programme "The Transformation of Economic Systems and the Reform
of Societies in Central and Eastern Europe", currently conducted at Frankfurt
Institute for Transformation Studies, European University Viadrina, Frankfurt
(Oder). The programme, involving economists, cultural and political scientists,
sociologists and jurists, is funded by Deutsche Forschungsgemeinschaft. The
editors would like to express their appreciation for this invaluable source of
financial support. Moreover, special thanks are due to two people who, in spite of
a tight schedule, have done their best to improve the readability and appearance of
this book: Melany Jacobs made skilful linguistic improvements to the original
manuscripts, while Andreas Paul took great care over the final layout.
Contents
Preface .................................................................................................................... V
List of Contributors ................................................................................................ 1X
Introduction: Transforming Social Security - Pensions in
Central-Eastern Europe
Katharina MOiler, Andreas Ry/l and Hans-JOrgen Wagener. ....................................... 1
I. Transition and Social Security in Central-Eastern Europe
Social Security - A Second Phase Transformation Phenomenon?
Hans-JOrgen Wagener .................................................................................................... 13
The Transformation of Social Security in Central and Eastern Europe
Krzysztof Hagemejer. ....................................................................................................... 31
II. Issues and Role Models in the Pension Reform Debate
The Controversy Between the Pay-As-You-Go System and the
Fully-Funded System in Old-Age Security
Hermann Ribhegge .......................................................................................................... 61
The Political Feasibility of Pension Reform in the Light of
Demographic Change
Friedrich Breyer and Klaus Stolte .................................................................................. 79
Pension Reforms in Germany: Major Topics, Decisions and Developments
Winfried Schmahl ............................................................................................................. 91
Paradigmatic Change in Old-Age Security - Latin American Cases
Katja Hujo ........................................................................................................................ 121
VITI Contents
III. Old-Age Security in Poland, Hungary and the Czech Republic:
Institutional Legacy, Political Actors and Reform
The Polish Pension System and its Problems
Zofia Czepulis-Rutkowska ............................................................................................ 143
The New Polish Pension Laws
Maciej lukowski ............................................................................................................. 159
Political Actors and Reform Paradigms in Old-Age Security in Poland
Stanislawa Golinowska ................................................................................................. 173
Hungarian Old-Age Security Prior to the 1998 Reform
R6bert I. Gal .................................................................................................................... 201
The New Hungarian Pension System and its Problems
Andras Simonovits ......................................................................................................... 211
The Politics of the Hungarian Pension Reform
Zsuzsa Ferge .................................................................................................................. 231
Political Actors and Reform Paradigms in Czech Old-Age Security
Martin Macha .................................................................................................................. 247
An Analysis of the Voluntary Pension Fund System in the Czech Republic
Tomas Jelinek and Ondrej Schneider. ........................................................................ 259
IV. Central-Eastern European Pension Reforms in Comparison
Distributional and Fiscal Consequences of Social Security
Reforms in Central-Eastern Europe
Mechthild Schrooten, Timothy M. Smeeding and Gert G. Wagner. ........................ 275
Structural Settings, Political Actors, and Paradigmatic Outcomes
in Central-Eastern European Pension Reforms
Katharina MOller. ............................................................................................................. 291
List of Contributors
Friedrich BREYER
University of Konstanz
Constance, Germany
Zofia CZEPULIS-RuTKOWSKA
Institute of Labour and Social Studies (IPiSS)
Warsaw, Poland
Zsuzsa FERGE
Eotvos Lonind University
Budapest, Hungary
Robert I. GAL
Social Research Informatics Centre (TARKI)
Budapest, Hungary
Stanislawa GOLINOWSKA
Institute of Labour and Social Studies (lPiSS)
Warsaw, Poland
Krzysztof HAGEMEJER
International Labour Office (ILO)
Geneva, Switzerland
KatjaHuJO
Free University of Berlin, Latin American Institute (LAI)
Berlin, Germany
TomM JELiNEK
Charles University
Prague, Czech Republic
Martin MACHA
Research Institute of Labour and Social Affairs (VUPSV)
Prague, Czech Republic
Katharina MULLER
European University Viadrina (EUV)
Frankfurt Institute for Transformation Studies (FIT)
Frankfurt (Oder), Germany
x List of Contributors
Hermann RmHEGGE
European University Viadrina (BUV)
Frankfurt (Oder), Germany
Andreas RYLL
European University Viadrina (BUV)
Frankfurt (Oder), Germany
Winfried SCHMAHL
University of Bremen, Centre for Social Policy Research (ZeS)
Bremen, Germany
Ondl'ej SCHNEIDER
Patria Finance
Charles University
Prague, Czech Republic
Mechthild SCHROOTEN
German Institute for Economic Research (DIW)
Berlin, Germany
Andras SIMONOVITS
Hungarian Academy of Sciences, Institute of Economics
Budapest, Hungary
Timothy M. SMEEDING
Syracuse University, Syracuse, NY, USA
Luxembourg Income Study (LIS), Differdange, Luxembourg
Klaus STOLTE
University of Konstanz
Constance, Germany
Hans-Jiirgen WAGENER
European University Viadrina (BUV)
Frankfurt Institute for Transformation Studies (FIT)
Frankfurt (Oder), Germany
GertG. WAGNER
German Institute for Economic Research (DIW), Berlin, Germany
European University Viadrina (BUV), Frankfurt (Oder), Germany
Maciej ZUKOWSKI
University of Economics (AE)
Poznan, Poland
Introduction
Transforming Social Security: Pensions in
Central-Eastern Europe
Katharina Milller, Andreas Ryll and Hans-Jiirgen Wagener
Transformation and social security
In the past decade, the countries of Central and Eastern Europe have witnessed
sweeping changes in their economies and societies. Compared with this, the area
of social security has long remained exempt from structural change, with the
exception of the introduction of unemployment benefits - a reaction to open
unemployment, so far unknown in Central and Eastern Europe (cf. Gotting 1996).
Unlike its counterparts in the West, the socialist welfare state included not only
protection against the loss of income due to old age, sickness, disability and other
contingencies, but also the right to a job, low prices for basic food, housing,
transport and energy, free or subsidised access to education and culture, and a
relatively egalitarian income distribution (cf. Adam 1991). This guarantee of
comprehensive social security enjoyed enduring approval amongst the population
of Central and Eastern Europe (cf. Ferge 1994).
Scholars have been highly critical of the socialist welfare state, although the
respective reasoning displays diametrical opposition. Some econOJ;nists have
characterised socialist social policy as "lavish" (Sachs 1996: VII) and "premature"
(Kornai 1995: 131), given the level of GDP per capita reached by Central and
Eastern European countries. They are convinced that past entitlements were too
generous to be affordable, contributing decisively to the economic collapse of
socialism. In contrast, scholars from the field of social policy have stressed the
shortcomings of the socialist welfare state: most social benefits were insufficiently
low (Ferge 1995) and by no means universally accessible to all citizens (Standing
1996). The "undeserving poor" (Ferge 1991: 134) - those considered to be
unproductive or disloyal, as well as their families - were excluded from socialist
welfare provision. Both lines of argument coincide in their criticism towards the
paternalistic, patronising character of the social safety net under socialism (e.g.
Deacon 1992).
While in the early years of transition, policymakers had assumed that
ownership rights, macroeconomic and political reforms were more pressing than a
