Trade-offs and Veto Players: Reforming Pensions in France and Italy
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Trade-offs and Veto Players: Reforming Pensions in France and Italy David Natali and Martin Rhodes European University Institute, Florence, Italy. E-mail: [email protected]; [email protected]
France, like other European countries, has faced growing challenges to its welfare state. Pensions in particular have been at the core of the public debate on recasting its ‘social model’. This article analyses reform processes in the 1990s and early 2000s to explain ‘how France reforms pensions’. While in other Bismarckian welfare states with pay-as-you-go pension systems, reform is usually undertaken via concertation; in France it is formulated by the government alone. Yet even in the French case of state-led policy-making, where the institutional preconditions for corporatism are weak, the political e´lite needs to adopt a consensual policy making style to overcome trade union veto powers. The Balladur pension reform of 1993 is used to explore this apparent contradiction between a unilateral approach and a consensual style, with an extension of the argument to the 2003 Raffarin reform. A comparison with Italy — a case of consensual, concerted pension policy-making — sheds light on ‘la voie franc¸aise’ to distributive policy reform. French Politics (2004) 2, 1–23. doi:10.1057/palgrave.fp.8200048 Keywords: new technoogies; geography; hubs; services; Hong Kong; Singapore
Introduction Over the last two decades, the French welfare state, like those of other European countries, has faced considerable challenges.1 Due to growing financial strains, an inequitable distribution of costs and benefits between generations and socio-economic groups, ineffective responses to new forms of social exclusion, and problems of economic competitiveness, pensions have been at the core of public debates on recasting welfare. As elsewhere, reform has proven difficult to achieve. For as in other Bismarckian welfare systems with pay-as-you-go (PAYG) pension systems, the pension policy network has been ‘over-crowded’, with multiple political and social actors, pursuing different reform priorities, all contending to influence the policy process and its outcomes. In order to implement a reform that responds effectively to new system demands and pressures, political e´lites have to secure the acquiescence of potential veto players, principally the trade unions. In doing so, policy-makers must engage in distributive reform, which
David Natali and Martin Rhodes Trade-offs and Veto Players
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inevitably sometimes triggers bitter social conflict, while also building consensus for its passage into law and eventual implementation. In this article, we analyse a decade of pension reforms in France and Italy to show how policy-makers in countries with similar social systems and problems have adopted quite different strategies to neutralize vetoes and pass reforms. The comparison between France (the central case) and Italy (a shadow case) allows us to focus on two divergent modes of policy-making: pluralist or pressure politics in the first and c
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